CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 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.
(Incorporated in Hong Kong with limited liability under the Companies Ordinance)
(Stock Code: 00144)
VOLUNTARY ANNOUNCEMENT
ANNUAL REPORT OF THE SUBSTANTIAL SHAREHOLDER
CHINA MERCHANTS PORT GROUP CO., LTD. FOR THE YEAR ENDED 31 DECEMBER 2020
This announcement is made by China Merchants Port Holdings Company Limited (the "Company", together with its subsidiaries the "Group") on a voluntary basis.
China Merchants Port Group Co., Ltd. ("CMPG") is a substantial shareholder of the Company whose A shares and B shares are listed on the Shenzhen Stock Exchange. As at the date of this announcement, CMPG is interested in approximately 41.85% of the total issued shares of the Company.
Pursuant to the relevant listing rules of the Shenzhen Stock Exchange, CMPG is required to publish its annual report for the year ended 31 December 2020 (the "CMPG Annual Report") which may contain financial information and certain operating statistics about the operations of the Group.
On 30 March 2021, CMPG released the CMPG Annual Report, details of which are appended to this announcement. The CMPG Annual Report is also available in the public domain (www.cninfo.com.cn).
− 1 −
Shareholders and potential investors should note that the CMPG Annual Report has been prepared in accordance with the Auditing Standards for Chinese Certified Public Accountants which are different from the accounting standards the Company adopts to prepare and present its financial information. Public investors are hereby reminded of the risks which may result from inappropriate reliance upon the relevant information. Holders of securities issued by the Company and the public investors should exercise caution when dealing in the securities of the Company.
By Order of the Board
China Merchants Port Holdings Company Limited
Deng Renjie
Chairman
Hong Kong, 30 March 2021
As at the date of this announcement, the Board comprises Mr. Deng Renjie, Mr. Liu Weiwu, Mr. Xiong Xianliang, Mr. Bai Jingtao, Mr. Ge Lefu, Mr. Wang Zhixian and Mr. Zheng Shaoping as executive directors; and Mr. Kut Ying Hay, Mr. Lee Yip Wah Peter, Mr. Li Ka Fai David and Mr. Bong Shu Ying Francis as independent non-executive directors.
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CHINA MERCHANTS PORT GROUP CO., LTD.
ANNUAL REPORT 2020
Date of disclosure: 31 March 2021
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Chairman's Statement
Dear shareholders,
I hereby present to you the annual report of China Merchants Port Group Co., Ltd. and its subsidiaries (the "Company") for the year ended 31 December 2020. On behalf of the Board, I would like to express my sincere gratitude to all of you for your long-term support to the Company.
The Company is a crucial vehicle for CMG to implement the "Belt and Road" Initiative promoted by China and the "Guangdong-HongKong-Macao Greater Bay Area" strategy. The Company is also the headquarters of CMG's port sector and tier one capital operation and management platform for the CMG's port assets, playing a key role in the consolidation and synergistic development of CMG's port assets. The Company has become the world's leading port investor, developer and operator.
Looking ahead, the Company will take actions and strive to be a world-class comprehensive port service provider. While expanding the port ecosystem with a focus on core port businesses and promoting the construction of "Intelligent Port" under the guidance of technology innovation; it will proactively take part in international port investment, development and operation, so as to optimize the port network system on a continuous basis and achieve balanced development on a regional level. By offering professional top-notch solutions, it will become customers' first choice of partner for cooperation, creating greater value for the Company, enhancing return for shareholders and contributing to the healthy development of the port industry and the continuous growth of the global trade.
Review for the year
In 2020, under the multiple impacts of the COVID-19 pandemic, anti-globalization and geopolitical risks, the overall global economy experienced recession to some degree. Weak consumption, shrinking trade and fluctuations in exchange rates, along with other uncertainties, imposed challenges to the daily operation and management of businesses. Despite the complex and difficult external environment, the Company firmly adhered to the strategic principle of "leveraging on its long-term strategy, tapping the current edges, driving through technology and embracing changes". Apart from coping with the pandemic proactively, it pursued various key construction projects in a steady manner, including the construction of homebased ports, overseas expansion and digital
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
innovation, and successfully accomplished its strategic goals and various operational objectives of the year.
In terms of port operation, the container port business delivered a container throughput totaled
121.71 million twenty-foot equivalent units (TEUs) in 2020, up 7.8% year-on-year. Looking into the regional performance, container throughput handled by the Company's ports in Mainland China totaled 85.76 million TEUs, up 1.0% year-on-year. Ports in Hong Kong and Taiwan handled a combined container throughput of 7.16 million TEUs, down 0.7% year-on-year, while overseas projects handled a total container throughput of 28.78 million TEUs, up 38.1% year-on-year. Bulk cargo volume handled by the Company's ports decreased by 7.1% year-on-year to 450 million tons, among which the Company's ports in Mainland China handled a total bulk cargo volume of 448 million tons, down 7.1% year-on-year, and the overseas port projects handled a total bulk cargo volume of 5.83 million tons, down 7.2% year-on-year. Among the major ports, container throughput handled in West Shenzhen Port Zone in China was 11.84 million TEUs, up 3.6% year- on-year. SIPG handled a container throughput of 43.50 million TEUs, representing a year-on-year increase of 0.5%. For overseas projects, CICT in Sri Lanka delivered a year-on-year growth of 1.9% by handling a container throughput of 2.93 million TEUs. LCT in Togo handled a container throughput of 1.36 million TEUs, representing a growth of 20.5% year-on-year. Kumport in Turkey handled a container throughput of 1.22 million TEUs, representing a decrease of 5.1% year-on-year. TCP in Brazil handled a container throughput of 0.98 million TEUs, representing a year-on-year increase of 7.4%. Benefiting from the inclusion of the eight newly acquired ports, Terminal Link SAS (TL) handled a container throughput of 21.13 million TEUs in the year, up 59.4% year-on-year.In terms of key priorities, firstly, the Company pursued the development of homebase ports to fully promote the construction of world-class leading ports and achieve the strategic goal of building a strong transportation country. West Shenzhen Port Zone has closely followed the development strategy of Guangdong-HongKong-Macao Greater Bay Area and continued to enhance its comprehensive capability. For overseas homebase ports, CICT and HIPG took full advantages of the synergy of port zones and developed themselves into international shipping centers in South Asia. Secondly, overseas expansion has achieved substantial progress. The delivery procedures of 8 terminals arising from the equity acquisition of 10 terminals, with superior quality, from CMA CGM through TL were completed. At the same time, the Company introduced Fujian
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Transportation Maritime Silk Road Investment and Management Co. Limited (福建省交通海丝投 资管理有限公司) as the strategic investor of HIPG. Thirdly, digital innovation continued to bear fruits. With the delivery and acceptance of the first berth, the Mawan Intelligent Port construction project will be developed into a benchmark for the intelligence upgrade of traditional terminals at home and abroad. The innovative development of the complex port in the Guangdong-Hong Kong- Macao Greater Bay Area greatly increased the turnover efficiency of terminals and containers. The Company proactively worked with leading Internet technology companies to explore the construction of an open platform for intelligent ports. It also invested and established China Merchants Port (Shenzhen) Industrial Innovation Private Equity Investment Fund (招商港口（深 圳 ） 产 业 创 新 私 募 股 权 投 资 基 金 ) in collaboration with China Merchants Venture, which enhanced the industry ecosystem through integration between the industry and the financial sector.
Outlook
Looking into 2021, the successful research, development and rollout of the COVID-19 vaccines will support the resumption of global economic and social activities and the world's economy is likely to recover. The year 2021 follows China's conclusion of building a moderately prosperous society in 2020 and marks the first year of the "14th Five-Year" Plan and 2035 Vision. China will take the initiative to adapt to the new environment and new challenges. Adhering to the new development philosophy, it will promote high-quality economic and social development by intensifying the supply-side restructuring, paying attention to demand-side management and establishing the new dual circulation development pattern. As the first country to witness a rapid economic rebound from the pandemic, China will continue to lead global economic recovery in 2021. It will accelerate the establishment of the new development pattern, in which the domestic economic cycle is the mainstay and the domestic and international economic cycles boost each other. The macro policy will remain consistent, stable and sustainable, while supply-side reform and demand-side management will further strengthen organic growth drivers. The industry will see opportunities arising from innovation policy in key areas such as the Yangtze River Delta, Guangdong-HongKong-Macao Greater Bay Area and Hainan Free Trade Port. In addition, with the steady progress of the "New Infrastructure" project, port investment will maintain stable growth. The construction of leading ports will facilitate green and intelligent port development, and port transformation and upgrade will support sustainable industry growth. The Company will firmly
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
adhere to the overall operation philosophy of "making progress amid stability", consistently implement the new development concepts and insist on the strategic principle of "leveraging on its long-term strategy, tapping the current edges, driving through technology and embracing changes". It will adhere to the dual-core-driven operating model of "marketization + digitization", while taking the initiative to respond actively and make breakthroughs on key missions, exploring potential in the process of reform and innovation, and enhancing market competitiveness with dedication, so as to become a world-class comprehensive port service provider and generate greater returns for shareholders.
In 2021, the Company will focus on the following tasks:
Firstly, the Company will spare no effort to promote the development of world-class leading ports to implement the strategy of building a strong transportation country. It will refine and optimize the future development goals and action plans for West Shenzhen Port Zone and boost comprehensive capabilities in line with the development strategy of the Guangdong-HongKong- Macao Greater Bay Area. Through better resource allocation, enhancement of the management basis, expansion of ancillary and value-addedservices, and improvement of service standards, it will develop a port ecosystem for win-winoutcomes. At the same time, it will be fully committed to further incorporating intelligence elements into Mawan Intelligent Port and developing West Shenzhen Port Zone into a globally leading intelligent port in Guangdong-Hong Kong-MacaoGreater Bay Area and the world, thereby achieving business innovation and increasing its influence in the region. In terms of overseas homebase ports, CICT and HIPG will focus on port business and strengthen cooperation with shipping companies, so as to enhance business synergy, capitalize on the collaborative advantages between port zones and evolve into world-classshipping centers in South Asia.
Secondly, the Company will enhance the overall planning for business abroad in line with the overseas layout of "East-West routes, South-North routes, regions along the Belt and Road Initiative". Apart from completing the delivery procedures for the remaining two terminals of CMA CGM, it will improve the operating effectiveness and efficiency of overseas projects by optimizing their management and control system and tapping into the location advantages of ports abroad. In the face of the current complex international dynamic, it will keep abreast of changes in
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
the trade environment and continuously search for port investment opportunities in fast-growing regions.
Thirdly, the Company will strengthen technology empowerment to create an innovative port
ecosystem. Taking technology innovation as an entry point, it will optimize and complement the comprehensive port service model to support long-term growth through technology empowerment. With a view to support new business, the Company will establish new business models in the Development and Research Center of CMPort to extend its business to the upstream and downstream of the industrial and value chain. It will also enhance the operating effectiveness and efficiency of current assets through technological and management innovation, and boost production and operation of ports and terminals by improving intelligent terminal operation via the "CM Chip" platform. With the "CM ePort" platform, the Company will innovate a business model to provide better customer service at ports. By establishing an intelligent management platform, it will also enhance comprehensive port management.
Fourthly, the Company will promote comprehensive port development. It will closely follow changes in the trade environment, seize opportunities brought by the adjustment of the global industrial chain, and utilize favorable policies to exploit the market. By adequately integrating the resources from the port industrial chain, value chain, logistics chain and innovation chain, it will explore the PPC comprehensive development model and seek for sustainable business development through "investment introduction to industrial parks and comprehensive land development".
Fifthly, the Company will further develop the operating management and control system for
sustainable value creation. It will continue to follow strategic guidance and optimize management and control on a regular basis. It will also establish an entire lifecycle management system for assets to enhance construction quality and management of major engineering projects. By the ongoing improvement of business management standards and the applicable range of regulation, it aims to develop a world-class operating and management system, with sustainable value, and a value- oriented management headquarters.
Appreciation
In 2020, facing the complex environment, various risks and challenges, the Company adhered to its strategic directives, took the initiative to embrace changes, and thus recorded positive results for various tasks and its operating performances have been growing steadily. All of these could not be
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
accomplished without the dedication from all of our staff and the support from our shareholders, investors, business partners, and those in the society who have taken to heart the Company's interest. For this, I would like to extend my most sincere appreciation and deepest gratitude.
Deng Renjie
Chairman
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the "Board"), the Supervisory Committee as well as the directors, supervisors and senior managers of China Merchants Port Group Co., Ltd. (hereinafter referred to as the "Company") hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein.
Bai Jingtao, the Company's legal representative, Lu Yongxin, the Company's Acting Chief Financial Officer, and Sun Ligan, the person-in-charge of the accounting organ hereby guarantee that the financial statements carried in this Report are factual, accurate and complete.
All the Company's directors have attended the Board meeting for the review of this Report and its summary.
Any forward-looking statements such as future plans or development strategies mentioned herein shall not be considered as the Company's promises to investors. And investors are reminded to exercise caution when making investment decisions. Possible risks faced by the Company and countermeasures have been explained in "Part IV Operating Performance Discussion and Analysis" herein, which investors are kindly reminded to pay attention to.
Securities Times, Shanghai Securities News, Ta Kung Pao (HK) and www.cninfo.com.cn have been designated by the Company for information disclosure. And all information about the Company shall be subject to what's disclosed on the aforesaid media. Investors are kindly reminded to pay attention to these media.
The Board has approved a final dividend plan as follows: based on 1,922,365,124 shares, a cash dividend of RMB3.80 (tax inclusive) per 10 shares is to be distributed to shareholders, with no bonus issue from either profit or capital reserves.
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Table of Contents
Part I Important Notes, Table of Contents and Definitions..................................... | 8 |
Part II Corporate Information and Key Financial Information........................... | 12 |
Part III Business Summary........................................................................................ | 19 |
Part IV Operating Performance Discussion and Analysis..................................... | 25 |
Part V Significant Events........................................................................................... | 60 |
Part VI Share Changes and Shareholder Information......................................... | 103 |
Part VII Preferred Shares........................................................................................ | 113 |
Part VIII Convertible Corporate Bonds................................................................. | 114 |
Part IX Directors, Supervisors, Senior Management and Staff.......................... | 115 |
Part X Corporate Governance................................................................................ | 134 |
Part XI Corporate Bonds......................................................................................... | 152 |
Part XII Financial Statements (See attached)....................................................... | 157 |
Part XIII Documents Available for Reference....................................................... | 158 |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Definitions
Term | Definition | |
The "Company", "CMPort" or "we" | China Merchants Port Group Co., Ltd., formerly known as "Shenzhen Chiwan | |
Wharf Holdings Limited" | ||
Chiwan Wharf | Shenzhen Chiwan Wharf Holdings Limited (stock name: Chiwan | Wharf/ |
Chiwan Wharf-B; stock code: 000022/200022) | ||
CMG | China Merchants Group Co., Limited | |
CMG Hong Kong | China Merchants Group (H.K.) Limited, a CMG wholly-owned subsidiary in | |
Hong Kong | ||
CMPID | China Merchants Port Investment Development Company Limited | |
CMPort Holdings | China Merchants Port Holdings Company Limited (00144.HK) | |
Broadford Global | Broadford Global Limited, a wholly-owned subsidiary of CMG Hong Kong | |
CMGD | China Merchants Gangtong Development (Shenzhen) Co., Ltd., a Broadford | |
Global majority-owned subsidiary in Shenzhen | ||
CWH (H.K.) | Chiwan Wharf Holdings (Hong Kong) Limited | |
Sinotrans Guangdong | Sinotrans Guangdong Co., Ltd. | |
Zhanjiang Infrastructure Investment | Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | |
CND Group | China Nanshan Development (Group) Inc. | |
CMB | China Merchants Bank Co., Ltd. | |
CMSK | China Merchants Shekou Industrial Zone Holdings Co., Ltd. | |
Malai Storage | Shenzhen Malai Storage Co., Ltd. | |
CM Qianhai Industrial | Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | |
CMI | China Merchants Investment Limited | |
Liaoning Port Group | Liaoning Port Group Co., Ltd. | |
SIPG | Shanghai International Port (Group) Co., Ltd. | |
CMICT | Ningbo Daxie China Merchants International Container Terminal Co., Ltd. | |
Ningbo Port | Ningbo Zhoushan Port Company Limited | |
Zhangzhou Port | Zhangzhou China Merchants Port Co., Ltd. | |
Shantou Port | Shantou CMPort Group Co., Ltd. | |
Tianjin Port Container Terminal | Tianjin Port Container Terminal Co., Ltd. | |
TICT | Tin-Can Island Container Terminal Ltd. | |
CMA | CMA CGM SA | |
TL | Terminal Link S.A.S. | |
Zhanjiang Port | Zhanjiang Port (Group) Co., Ltd. | |
Xiamen Port | Zhangzhou China Merchants Xiamen Port Affairs Co., Ltd. | |
CCT | Chiwan Container Terminal Co., Ltd., a majority-owned subsidiary | of the |
Company | ||
Kumport | Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim Sirketi | |
Port of Newcastle | Port of Newcastle | |
TCP | TCP Participações S.A | |
CICT | Colombo International Container Terminals Ltd. | |
PDSA | Port de Djibouti S.A. | |
HIPG | Hambantota International Port Group | |
Cyber Chic | Cyber Chic Company Limited |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | |
Haixing Harbor | Shenzhen Haixing Harbor Development Co., Ltd. | |
Dalian Port | Dalian Port (PDA) Company Limited | |
Shunde New Port | Guangdong Yide Port Limited | |
Northeast Asia Investment | China Merchants Northeast Asia Development Investment Co., Ltd. (tentative | |
name, final name subject to the officially registered one) | ||
Jinyu Rongtai | Shenzhen Jinyu Rongtai Investment Development Co., Ltd. | |
China Merchants Venture | China Merchants Venture Capital Management Co., Ltd. | |
China Merchants Venture Fund | Shenzhen China Merchants Venture Capital Fund Center (Limited Partnership) | |
CMHIT | China Merchants Holdings (International) Information Technology Co., Ltd. | |
Jifa Logistics | Dalian Port Jifa Logistics Co., Ltd. | |
DPCD | Dalian Port Container Development Co., Ltd. | |
Yingkou Port Group | Yingkou Port Group Co., Ltd. | |
DPN | Dalian Port Logistics Network Co., Ltd. | |
YPIT | Yingkou Port Information Technology Co., Ltd. | |
CMHD | China Merchants Holdings Djibouti | |
OHD | Orienture Holdings (Djibouti) FZE (tentative name, final name subject to the | |
officially registered one) | ||
DNC | Djibouti New Co (tentative name, final name subject to the officially registered | |
one) | ||
RSW | Red Sea World (tentative name, final name subject to the officially registered | |
one) | ||
The "Assets Purchase via Share Offering" | Chiwan Wharf's purchase of 1,313,541,560 ordinary CMPort Holdings shares | |
from CMID via share offering | ||
SASAC of the State Council | State-Owned Assets Supervision and Administration Commission of the State | |
Council | ||
CSRC | China Securities Regulation Commission | |
Shenzhen CSRC | Shenzhen Bureau of China Securities Regulatory Commission | |
SZSE | Shenzhen Stock Exchange | |
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 "Articles of Association" | The Articles of Association of China Merchants Port Group Co., Ltd. | |
The "Stock Listing Rules" | The Stock Listing Rules of the Shenzhen Stock Exchange | |
The cninfo website | www.cninfo.com.cn | |
CM ePort | The wharf e-commerce platform, i.e. the unified customer service platform | |
TEU | Twenty Foot Equivalent Unit | |
RMB | Expressed in the Chinese currency of Renminbi | |
Expressed in tens of thousands of Renminbi | ||
RMB'0,000 | ||
Expressed in hundreds of millions of Renminbi | ||
RMB'00,000,000 | ||
(unless otherwise specified) | ||
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name | CM Port Group/ | Stock code | 001872/201872 | |||||||
CM Port Group B | ||||||||||
Stock exchange for stock listing | Shenzhen Stock Exchange | |||||||||
Company name in Chinese | 招商局港口集团股份有限公司 | |||||||||
Abbr. | 招商港口 | |||||||||
Company name in English (if any) | China Merchants Port Group Co., Ltd. | |||||||||
Abbr. (if any) | CMPort | |||||||||
Legal representative | Bai Jingtao | |||||||||
Registered address | 23-25/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang | |||||||||
Street, Nanshan, Shenzhen, PRC | ||||||||||
Zip code | 518067 | |||||||||
Office address | 23-25/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang | |||||||||
Street, Nanshan, Shenzhen, PRC | ||||||||||
Zip code | 518067 | |||||||||
Company website | http://www.cmp1872.com | |||||||||
Email address | Cmpir@cmhk.com | |||||||||
II Contact Information | ||||||||||
Board Secretary | Securities Representative | |||||||||
Name | Li Yubin (Acting) | Hu Jingjing | ||||||||
24/F, China Merchants Port Plaza, | 1 | 24/F, China Merchants Port Plaza, 1 | ||||||||
Address | Gongye 3rd Road, Zhaoshang Street, | Gongye 3rd Road, Zhaoshang Street, | ||||||||
Nanshan, Shenzhen, PRC | Nanshan, Shenzhen, PRC | |||||||||
Tel. | +86 | 755 26828888 | +86 | 755 26828888 | ||||||
Fax | +86 | 755 26886666 | +86 | 755 26886666 | ||||||
Email address | Cmpir@cmhk.com | Cmpir@cmhk.com | ||||||||
III Media for Information Disclosure and Place where this Report Is Lodged | ||||||||||
Newspapers designated by the | Company for information | Securities Times, Shanghai Securities News, Ta | ||||||||
disclosure | Kung Pao | |||||||||
Website designated by CSRC for publication of this Report | http://www.cninfo.com.cn | |||||||||
Place where this Report is lodged | Board Office | |||||||||
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
IV Change to Company Registered Information
Unified social credit code | 91440300618832968J | ||||||||
On 14 December 2018, the Company changed its business scope registered with the | |||||||||
industrial and commercial administration. The new business scope includes: | |||||||||
construction, management and operation of ports and wharves; bonded warehousing | |||||||||
of various goods for import and export; development, construction and operation of | |||||||||
supporting parks in ports; loading, unloading, transshipment, warehousing and | |||||||||
transportation of international and domestic goods and processing of goods; | |||||||||
devanning and LCL operations, cleaning, repairing, manufacturing and leasing of | |||||||||
containers; international freight forwarding; vehicle and ship leasing; the provision | |||||||||
Change | to | principal | of ship and port services | including | the provision of | fuels, | supplies and daily | ||
activity | of | the | Company | necessities for ships; ship | towing (no | operation using | foreign | ships); leasing and | |
since going | public | (if | repair services of port facilities, equipment and machinery; import and export of | ||||||
any) | |||||||||
various goods and technologies on a self-operation or agency basis, excluding the | |||||||||
goods and technologies restricted or forbidden for import and export by the state; | |||||||||
port logistics and port information technology consulting services; technical | |||||||||
development and services in respect of modern logistics information systems; supply | |||||||||
chain management and related services; design of logistics plans; engineering project | |||||||||
management; development, research and consulting services in respect of port | |||||||||
engineering technologies. (In respect of any operations that require approval | |||||||||
according to law, the approval must be obtained before operation). | |||||||||
1. On 8 June 2018, as the ownership of 209,687,067 Chiwan Wharf shares formerly | |||||||||
held by CND Group and 161,190,933 Chiwan Wharf shares formerly held by Malai | |||||||||
Storage was officially transferred to CMGD, CMGD, holding 57.52% of the | |||||||||
Company's outstanding share capital, became the controlling shareholder of the | |||||||||
Every | change | of | Company. Meanwhile, CMG remains the actual controller of the Company. | ||||||
2. On 26 December 2018, the Company issued RMB-denominated ordinary shares | |||||||||
controlling | shareholder | ||||||||
since | incorporation | (if | (A-shares) at RMB21.46/share to CMPID for the acquisition of the 1,313,541,560 | ||||||
any) | CMPort Holdings ordinary shares that it held. Upon the Acquisition, the Company's | ||||||||
total share capital has become 1,793,412,378 shares. Meanwhile, as Broadford | |||||||||
Global controls an 87.81% aggregated voting right in the Company (direct interests | |||||||||
and interests through CMPID and CMGD), it is the direct controlling shareholder of | |||||||||
the Company. Meanwhile, CMG remains the actual controller of the Company. | |||||||||
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
V Other Information
The independent audit firm hired by the Company:
Name | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
Office address | 30/F, 222 Yan An Road East, Huangpu District, Shanghai, P.R.C. |
Accountants writing | Li Weihua, Zhang Min |
signatures | |
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Applicable √ Not applicable
2020 | 2019 | 2020-over- | 2018 | |
2019 change | ||||
Operating revenue | 12,618,529,996.02 | 12,123,829,423.74 | 4.08% | 9,703,394,622.58 |
(RMB) | ||||
Net profit | ||||
attributable to the | ||||
listed company's | 2,065,322,969.66 | 2,898,192,168.84 | -28.74% | 1,090,418,910.77 |
shareholders | ||||
(RMB) | ||||
Net profit | ||||
attributable to the | ||||
listed company's | ||||
shareholders | 1,262,830,563.26 | 1,037,766,875.23 | 21.69% | 516,155,803.81 |
before exceptional | ||||
gains and losses | ||||
(RMB) | ||||
Net cash generated | 5,495,800,917.01 | 5,501,873,415.94 | -0.11% | 4,288,575,424.84 |
from/used in | ||||
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||
operating activities | |||||
(RMB) | |||||
Basic earnings per | 1.07 | 1.59 | -32.70% | 0.61 | |
share (RMB/share) | |||||
Diluted earnings | |||||
per share | 1.07 | 1.59 | -32.70% | 0.61 | |
(RMB/share) | |||||
Weighted average | |||||
return on equity | 5.66% | 8.71% | -3.05% | 3.88% | |
(%) | |||||
Change of 31 | |||||
December, 2020 | |||||
31 December, 2020 | 31 December, 2019 | over 31 | 31 December, 2018 | ||
December, 2019 | |||||
(%) | |||||
Total assets | 168,543,611,777.21 | 156,696,917,845.87 | 7.56% | 128,018,084,415.68 | |
(RMB) | |||||
Equity attributable | |||||
to the listed | |||||
company's | 37,117,806,052.18 | 35,972,804,419.42 | 3.18% | 30,760,475,412.93 | |
shareholders | |||||
(RMB) |
Indicate by tick mark whether the lower of the net profit attributable to the listed company's shareholders before and after exceptional gains and losses was negative for the last three accounting years, and the latest independent auditor's report indicated that there was uncertainty about the Company's ability to continue as a going concern.
□ Yes √ No
Indicate by tick mark whether the lower of the net profit attributable to the listed company's shareholders before and after exceptional gains and losses was negative.
□ Yes √ No
VII Accounting Data Differences under China's Accounting Standards for Business Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
3. Reasons for Accounting Data Differences between Domestics and Foreign Accounting Principle: Not applicable
VIII Key Financial Information by Quarter
Unit: RMB | |||||
Q1 | Q2 | Q3 | Q4 | ||
Operating revenue | 2,886,025,618.74 | 3,036,471,539.74 | 3,239,264,119.14 | 3,456,768,718.40 | |
Net profit attributable to the | |||||
listed company's | 149,871,785.99 | 482,926,799.84 | 642,339,845.93 | 790,184,537.90 | |
shareholders | |||||
Net profit attributable to the | |||||
listed company's | 199,867,940.76 | 344,723,973.78 | 605,513,230.59 | 112,725,418.13 | |
shareholders before | |||||
exceptional gains and losses | |||||
Net cash generated | |||||
from/used in operating | 847,165,371.60 | 1,224,260,773.32 | 1,665,387,875.49 | 1,758,986,896.60 | |
activities |
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what have been disclosed in the Company's quarterly or semiyearly reports.
□ Yes √ No
IX Exceptional Gains and Losses
Unit: RMB | |||||
Item | 2020 | 2019 | 2018 | Note | |
Gain or loss on disposal of | |||||
non-current assets (inclusive | 1,480,572,929.90 | 4,794,562,782.79 | 6,512,480.64 | - | |
of impairment allowance | |||||
write-offs) | |||||
Government subsidies | |||||
charged to current profit or | |||||
loss (exclusive of government | |||||
subsidies given in the | 238,216,977.76 | 162,587,042.38 | 14,050,544.16 | - | |
Company's ordinary course of | |||||
business at fixed quotas or | |||||
amounts as per the | |||||
government's uniform |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||
standards) | |||||
Capital occupation charges on | |||||
non-financial enterprises that | 232,906,880.87 | 19,571,040.36 | - | - | |
are charged to current profit or | |||||
loss | |||||
Current profit or loss on | |||||
subsidiaries obtained in | |||||
business combinations | |||||
involving enterprises under | - | - | 2,685,592,888.44 | - | |
common control from the | |||||
period-beginning to | |||||
combination dates, net | |||||
Gain or loss on fair-value | |||||
changes in held-for-trading | |||||
and derivative financial assets | |||||
and liabilities & income from | |||||
disposal of held-for-trading | |||||
and derivative financial assets | -409,658,173.58 | 66,075,363.30 | - | - | |
and liabilities and other | |||||
investments in debt | |||||
obligations (exclusive of the | |||||
effective portion of hedges | |||||
that arise in the Company's | |||||
ordinary course of business) | |||||
Reversed portions of | |||||
impairment allowances for | |||||
accounts receivable and | 46,709,066.77 | - | - | - | |
contract assets which are | |||||
tested individually for | |||||
impairment | |||||
Custodian fees earned from | 1,886,792.45 | - | - | - | |
entrusted operation | |||||
Non-operating income and | -42,615,710.20 | 482,165,418.73 | -3,767,817.73 | - | |
expense other than the above | |||||
Gain resulted | |||||
from | |||||
revaluation to | |||||
the fair value | |||||
Other gains and losses that | of the | ||||
original | |||||
meet the definition of | 753,988,749.80 | 732,644,357.06 | -121,311,211.59 | ||
holding | |||||
exceptional gain/loss | |||||
shares of | |||||
CMICT due | |||||
to the | |||||
acquisition in | |||||
2020 | |||||
Less: Income tax effects | 241,651,237.66 | 1,504,203,995.96 | 3,010,149.89 | - | |
Non-controlling | 1,257,863,869.71 | 2,892,976,715.05 | 2,003,803,627.07 | - | |
interests effects (net of tax) | |||||
Total | 802,492,406.40 | 1,860,425,293.61 | 574,263,106.96 | -- | |
Explanation of why the Company reclassifies recurrent gain/loss as an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Offering Their Securities to the Public-Exceptional Gain/Loss Items: □ Applicable √ Not applicable
No such cases for the Reporting Period.
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Part III Business Summary
I Principal Activity of the Company in the Reporting Period 1. Main business scope and business models
The Company is principally engaged in the handling, warehousing and transportation of containers and bulk cargoes, as well as the provision of other ancillary services. It principally operates 24 container berths and 18 bulk cargo berths in the ports in West Shenzhen and Dongguan Machong, 9 container berths, 2 bulk cargo berths, 10 general cargo berths, and 1 coal-handling specific berth in Shantou Port, 2 container berths and 33 bulk cargo berths in Zhanjiang Port, 4 multi-purpose berths in Shunde Port, 2 container berths and 6 bulk cargo berths in Zhangzhou Port, 4 container berths in Ningbo Daxie, 4 container berths in CICT, Sri Lanka, 4 multi-purpose berths, 2 oil berths and 4 container berths in HIPG, Sri Lanka, 3 container berths in LCT, Togo, and 4 container berths in TCP, Brazil. Moreover, the Company invests in container hubs in Shanghai and Tianjin and expands its layout to ports in Asia, Africa, Europe, Oceania, South America and North America.
The major business segments of China Merchants Port Group Co., Ltd. are as follows:
Business Segments | Applications |
Container handling and warehousing: the Company provides ship berthing, loading | |
and discharging services to ship companies, offers container storage service to ship | |
companies and cargo owners and provides overhead box services to tractor | |
Cargo handling | companies. The Company also engages in the businesses of division or merger of |
cargoes in containers, container leasing and container maintenance; | |
and warehousing | |
Bulk cargo handling and warehousing: the Company is engaged in bulk cargo | |
handling and transportation in port zones, as well as storage services in yards. The | |
major types of cargoes handled include food, steel, woods and sandstones. | |
The ancillary port-related services of the Company mainly include tugboat berthing | |
Ancillary port- | assistance and barge services at the arrival of ships to the ports, tallying in the course |
related services | of cargo handling, and supply of shore power and freshwater for vessels. |
Bonded logistics | The Company provides various services for clients (including logistics companies, |
operations | trading companies or cargo owners), for example, warehouse/yard leasing, loading |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
and unloading in warehouses/yards, customs clearance and division or merger of cargoes at terminals. It also provides documentation services for tractors arriving or leaving the bonded logistics parks.
2. Development stage and cyclical characteristic of the industry in which the Company operates and its industry position during the reporting period
The port industry is a crucial cornerstone industry for national economic and social development, and is closely linked to global economy and trade. In 2020, as the COVID-19 pandemic spread across the world, the global economy took a heavy hit, resulting in a complex and unfavorable international political and economic landscape. In the first half of the year, the shrinking seaborne freight volume of global container throughput, due to the pandemic, posed challenges to port production. During the second half of the year, most of the countries reopened their economy, so the port and shipping market began to recover. With the full resumption of operation and production in China, import and export rebounded by degrees and domestic port production grew steadily. The pandemic has also accelerated the digitalization of the port and shipping industry, which will bring new development opportunities for cost reduction, efficiency enhancement and innovation in the business model.
The Company is the largest port developer, investor and operator in the PRC and the leading comprehensive port service provider in the world, with a well-developed port network at major hub locations along coastal China. It has also successfully established presences in Asia, Africa, Europe, Mediterranean, Oceania, South America and North America. By its proactive, sound and efficient operating style, the Company capitalizes on its global port portfolio, professional management experience, the self-developedstate-of-the-art terminal operation system and integrated logistics management platform for exports and imports, thereby providing its customers with timely and efficient port and maritime logistics services along with comprehensive and modern integrated logistics solutions. In addition, the Company also invests in bonded logistics operation and launches integrated park development business, facilitates the transformation and upgrade of port industry,
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
develops comprehensive port services, increases its industry competitiveness, and creates greater
value through the synergies of the existing terminal network.
-
Significant Changes in Major Assets
1. Significant Changes in Major Assets
Major assets | Main reason for significant changes | ||||||||
Equity | No significant change | ||||||||
assets | |||||||||
Fixed assets | No significant change | ||||||||
Intangible | No significant change | ||||||||
assets | |||||||||
Construction | No significant change | ||||||||
in progress | |||||||||
2. Major Assets Overseas | |||||||||
Control | Return | As % of the | Material | ||||||
Asset | Source | Asset value | Locatio | Operations | measures to | generated | Company's | impairment | |
(RMB'0,000) | n | protect | (RMB'0,00 | net asset | risk | ||||
asset safety | 0) | value | (yes/no) | ||||||
Appointing | |||||||||
Acquired | Port | director, | |||||||
Equity | Hong | investment | supervisor | ||||||
via share | 14,005,085.57 | 506,441.23 | 87.92% | No | |||||
assets | Kong | and | and senior | ||||||
offering | operations | manageme | |||||||
nt | |||||||||
Other | N/A | ||||||||
information | |||||||||
III. Core competitiveness analysis
1. Commitment to the development pattern of the global industrial chain and the national "Belt and Road" cooperation initiative to build and capability to allocate and operate its global port network.
As an important carrier for domestic and overseas port investment and operation of CMG, the Company gained in-depth insight into the current states, trends and driving factors of the global industrial chain. Based on the insight, it followed the development pattern of the global industrial chain and seized the significant policy opportunities arising from the key "Belt and Road" initiative
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
and the building of the Guangdong-HongKong-Macao Greater Bay Area to actively build a global port network and arrange for the investment and allocation of global resources.
In recent years, through mergers, acquisitions, restructuration, renovation of old ports, and building of new ports, the Company has been consistently improving its modern port chain with global coverage, enhancing the value of the port industry, and pushing forward balanced regional development. Leveraging the West Shenzhen homebase port, the Company provided a comprehensive and integrated logistic service platform for the development of the Guangdong- Hong Kong-Macao Greater Bay Area. After years of overseas development, CMPort has extended the port and park-related business across Southeast Asia, South Asia, Africa, Europe, Oceania, etc. Its port network comprises 50 ports which are located in 26 countries and regions on six continents. Adhering to the principle of "extensive consultation, joint development and shared benefits", CMPort has developed local-based business operation and formed a community of shared future with stakeholders from countries and regions along the "Belt and Road" initiative to explore development opportunities with concerted efforts. At the same time, the diversified investment and operation of port assets at home and abroad have also effectively enhanced its capabilities of resisting risks of industry fluctuations, trade fictions and unexpected events.
2. Centering on end customers, developing comprehensive logistics service, securing the safety of the global supply chain for Chinese enterprises.
The Company aims at increasing its global presence with shipping routes across five continents. As both the shipping and port sectors gradually shifted to forming alliances, the Company actively integrated its domestic and overseas port assets and capitalized on its relatively complete global port network to provide more comprehensive and effective integrated logistics service solutions for the global supply chain to satisfy customer needs, forming its unique competitive strength. Based on the West Shenzhen homebase port and the Shunde New Port, it built the first complex port in the Greater Bay Area to meet the unsatisfied customer needs, promoting the development of the Guangdong-HongKong-Macao Greater Bay Area. While safeguarding the global industrial chain for Chinese industrial enterprises, it also secured supply for people's livelihood in the country through the import and domestic trade business, thereby accelerating the formation of China's new development pattern, the domestic economic cycle as the mainstay and the domestic and international economic cycles boosting each other.
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
3. Long history and sound shareholder background
Established in 1872, which is 149 years ago, CMG has become an exemplary model for Chinese enterprises and developed strong brand power. It is also a key state-owned enterprise under the direct administration of the PRC central government. Headquartered in Hong Kong, CMG is an integrated enterprise with diversified businesses and one of the four major Chinese enterprises in Hong Kong. Currently, it is mainly engaged in three core industries namely transportation, finance, and real estate, while focusing on four key sectors including infrastructure and equipment manufacturing, logistics and shipping, integrated finance, and comprehensive development of cities and parks. CMG has been rated as a Grade A enterprise in the Operating Results Assessment of the State-owned Assets Supervision and Administration Commission of the State Council for 16 consecutive years and is a central state-owned enterprise that owns two Fortune 500 companies.
Being a crucial player and facilitator of the national "Belt and Road" initiative, CMG has accelerated its international development and preliminarily formed a relatively complete network of overseas ports, logistics, finance, and park business. The sound shareholder background and ample domestic and overseas resources of CMG have provided strong support to CMPort for constructing a global port cooperation platform with international vision and global expansion capabilities and ultimately becoming a world-class comprehensive port service provider.
4. Innovative development and identification of and adaptation to changes
To maximize return for shareholders, the Company strived for "technology-led and innovation- driven" growth philosophy. Through in-depth industry researches and analysis of management, model and technology development trend, it gains insights into changing customer demands and meets future challenges with innovative development.
Taking port business as the core and leveraging the synergy of different port zones as well as city- industry integration, the Company is actively exploring and facilitating the comprehensive port development model of "Port-Park-City". Based on the traditional loading and discharging and ancillary services at ports, it established the comprehensive development model that offered high value-added services to enterprises. By gathering talents, data, funds and commodities, the Company provided economic support for urban development, continued to innovate industry development model, and expanded regional coverage and influence, thereby driving urban upgrade and development. Currently, the Company has participated in promoting the port-oriented regional
23
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
comprehensive development and construction in various overseas regions and has achieved phased progresses. At the same time, the innovative business development model introduces the elements of China Merchants to urban development and helps foster new profit growth points for the Company. In response to current development needs, the Company has launched the intelligence- integrated comprehensive port services. The nine major intelligent elements of the Mawan Intelligent Port have been shaped into intelligence-integrated products available for duplication and promotion. Meanwhile, the Company has been developing an intelligence management platform to ensure its internal management up to date. During the pandemic, its innovation platform and technology application achieved notable breakthroughs.
5. Extensive experience in professional port management with sound and efficient operating style
Adhering to the proactive, sound and efficient operating style and benefiting from its global port assets and resources portfolio, the Company is committed to providing customers with timely and efficient port and maritime logistics services as well as professional and first-class solutions, and has become the preferred partner for customers and an important gateway for the country's foreign trade, thereby making due contributions to the country's foreign trade development. At the same time, the Company also made an extensive investment in bonded logistics business to expand its port value chain and enhance industrial value. Taking advantages of the synergy of its existing terminal network, the Company created values for both its customers and shareholders.
The Company has earned itself good reputation across the industry by its professional management experience accumulated for years, its self-developed global leading terminal operating system and integrated logistics management platform for import and export, its extensive maritime logistics support system with all-rounded modern integrated logistics solutions, and its high-quality engineering management and reliable service offerings.
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Part IV Operating Performance Discussion and Analysis
I Overview
1. External Environment Analysis
(1) Macroeconomic environment
In 2020, the increasingly complex international environment was characterized by the significant increase in uncertainties and the far-reaching and unprecedented impact brought by COVID-19. According to the "World Economic Outlook" report published by the International Monetary Fund in January 2021, the global economy is expected to shrink by 3.5% year-on-year in 2020. Developed economies and emerging economies are expected to decline by 4.9% and 2.4% respectively, while the America and Eurozone economies are expected to record a decrease of 3.4% and 7.2% respectively due to the severe impact from COVID-19 pandemic. The COVID-19 pandemic started to spread across East and Southeast Asia in early 2020. Since the second quarter, America and Europe have become the pandemic epicenters and witnessed the second and third waves of the outbreak, posing serious challenges to global economic recovery. Facing the complicated and difficult international environment, China organized and promoted pandemic prevention and control along with economic and social development. Its efforts not only effectively facilitated the restoration of normal production and everyday life, but also yielded significant strategic achievements in disease prevention and control. In the meantime, China accelerated the establishment of the new development pattern in which the domestic economic cycle is the mainstay and the domestic and international economic cycles boost each other. As a result, the national economy recovered steadily and recorded an annual GDP growth of 2.3% in 2020, making China the only major economy with positive economic growth in the world. In the second half of 2020, the infrastructure constructions, along with other fixed asset investments, provided greater supports to economy recovery and China recorded better-than-expected growth in foreign trade driven by regional trade and cooperation. Consumption demand gradually picked up and the economy showed positive signs of recovery. Overall, China's economy maintained its upward trend in the long-run. To achieve high-quality economic growth, China will intensify the supply-side
25
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
restructuring and pay attention to demand-side management in the meantime. According to the statistics published by the General Administration of Customs, China's total import and export value amounted to RMB32.16 trillion in 2020, representing an increase of 1.9% year-on-year. Among which, the export value was RMB17.93 trillion, representing an increase of 4.0% year-on- year, while the import value was RMB14.23 trillion, representing a decrease of 0.7% year-on-year. Trade surplus amounted to RMB3.7 trillion, representing an increase of 27.4% year-on-year.
(2) Market environment of the port and shipping industry
In 2020, the global container shipping market suffered from volatile demand. During the first half of the year, the container shipping market was severely impacted by the pandemic, which resulted in the idling of shipping capacity to a certain extent. In the second half of the year, various countries implemented economic stimulus policies and commerce demand rebounded. These factors, coupled with high demand in traditional peak season and the shortage of containers, led to ongoing strong demand in the container shipping market and the utilization of idle capacity in a gradual pace. The significant improvement in business performances of shipping companies in general was driven by rising freight rates.
The COVID-19 pandemic led to the decline in global port container throughput in 2020. According to data from Alphaliner, the global container port throughput amounted to 827 million TEUs in 2020, down by 1.4% year-on-year. Benefiting from the success in domestic pandemic prevention and control, China's import and export for foreign trade stabilized rapidly and continued to grow, while the domestic port production maintained an upward trend in general. According to the information published by the Ministry of Transport of the People's Republic of China, the accumulated port container throughput in China amounted to 264 million TEUs in 2020, representing a year-on-year increase of 1.2%.
2. Port Business Review
(1) Overview of port business
In 2020, the Company's ports handled a total container throughput of 121.71 million TEUs, up by 7.8% year-on-year. Bulk cargo volume handled by the Company's ports decreased by 7.1% year- on-year to 450 million tons. During the Reporting Period, operating revenue of the Company amounted to RMB12.619 billion, representing a year-on-year increase of 4.08%.
Table 4-1 Throughput of the Company and changes in 2020
Item | 2020 | 2019 | Changes |
Container throughput ('0,000 TEU) | 12,171 | 11,293 | 7.8% |
Among which: Mainland China | 8,576 | 8,488 | 1.0% |
26
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||
Hong Kong and Taiwan | 716 | 721 | -0.7% | ||
Overseas | 2,878 | 2,084 | 38.1% | ||
Bulk cargo throughput (hundred | 4.5 | 4.9 | -7.1% | ||
million tonnes) | |||||
Among which: Mainland China | 4.48 | 4.83 | -7.1% | ||
Overseas | 0.058 | 0.063 | -7.2% |
Note: 1. The statistics represented the total throughput of the holding subsidiaries, associates and joint ventures of the Company. 2. Discrepancies between totals and sums of sub-items listed are due to rounding.
For container business, the Company's ports in China handled container throughput of 85.76 million TEUs, representing a year-on-year increase of 1.0%. Ports in Hong Kong and Taiwan regions contributed total container throughput of 7.16 million TEUs, indicating a decrease of 0.7% year-on-year. The total container throughput handled by the Company's overseas ports grew by 38.1% year-on-year to 28.78 million TEUs, mainly benefiting from the inclusion of the eight newly acquired terminals by TL and the business growth of LCT in Togo and TCP in Brazil. In terms of bulk cargo business, the Company's ports in Mainland China handled a bulk cargo volume of 448 million tons, down 7.1% year-on-year. Overseas ports handled a bulk cargo volume of 5.83 million tons, down 7.2% year-on-year, mainly due to the decrease in throughput at PDSA in Djibouti and Kumport in Turkey.
(2) Operation condition of port business by region
Table 4-2 Container throughput of the Company and changes in 2020
(in '0,000 TEU)
Region and port company | 2020 | 2019 | Changes | |||
Holding | West Shenzhen Port | 1,184 | 1,142 | 3.6% | ||
Zone | ||||||
Pearl River | company | |||||
Shunde New Port | 43 | 30 | 44.1% | |||
Delta | ||||||
Joint stock | Chu Kong River Trade | 106 | 109 | -3.4% | ||
company | Terminal | |||||
Yangtze River | Joint stock | SIPG Group | 4350 | 4,330 | 0.5% | |
Delta | company | |||||
27
China Merchants Port Group Co., Ltd.Annual Report 2020
Holding | Ningbo Daxie | 332 | 329 | 0.9% | |
company | |||||
Tianjin Port Container | 787 | 447 | 75.8% | ||
Joint stock | Terminal | ||||
Bohai Rim | |||||
company | |||||
QQCTU | 810 | 792 | 2.2% | ||
Dalian Port | 654 | 1,022 | -36.0% | ||
South-East | Zhangzhou Port | 32 | 42 | -25.4% | |
Holding | |||||
region of | |||||
company | Shantou Port | 159 | 134 | 18.9% | |
Mainland China | |||||
South-West | Holding | ||||
region of | Zhanjiang Port | 122 | 111 | 10.1% | |
company | |||||
Mainland China | |||||
Holding | |||||
company/ | CMCS/ | 556 | 557 | -0.2% | |
Hong Kong and | Joint stock | Modern Terminals | |||
company | |||||
Taiwan | |||||
Joint stock | Taiwan Kao Ming | 160 | 164 | -2.2% | |
company | Container | ||||
Holding | CICT | 293 | 288 | 1.9% | |
TCP | 98 | 92 | 7.4% | ||
company | |||||
LCT | 136 | 113 | 20.5% | ||
Overseas | TL | 2113 | 1,325 | 59.4% | |
Joint stock | Kumport | 122 | 128 | -5.1% | |
company | PDSA | 86 | 92 | -6.3% | |
TICT | 30 | 47 | -35.3% | ||
Total | 12,171 | 11,293 | 7.8% |
Note: 1. Due to the restructuring of Tianjin Five Continents International Container Terminal Co., Ltd., a former joint stock company of the Company, the Company has adjusted the statistical caliber of Tianjin Port Container Terminal and included it in the statistics since September 2019; 2. Since April 2020, the Company has newly included the business volume of eight new terminals
28
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
acquired by TL, a joint stock company of the Company; 3. Discrepancies between totals and sums of sub-items listed are due to rounding.
Table 4-3 Bulk cargo volume handled by the Company and changes in 2020
(in '0,000 tonnes)
Region and port company | 2020 | 2019 | Changes | |||
West Shenzhen Port | 1,807 | 1,300 | 39.0% | |||
Holding | Zone | |||||
Dongguan Machong | 1,548 | 1,227 | 26.2% | |||
Pearl River | company | |||||
Delta | Shunde New Port | 395 | 226 | 74.4% | ||
Joint stock | Chu Kong River Trade | 308 | 353 | -12.8% | ||
company | Terminal | |||||
Yangtze River | Joint stock | SIPG Group | 7,565 | 11,515 | -34.3% | |
Delta | company | |||||
QQTU | 1,629 | 1,559 | 4.5% | |||
Qingdao Port | 6,315 | 5,990 | 5.4% | |||
Bohai Rim | Joint stock | Dongjiakou | ||||
company | Dalian Port | 13,124 | 13,204 | -0.6% | ||
Laizhou Harbour | 2,056 | 2,272 | -9.5% | |||
Affairs | ||||||
South-East | Zhangzhou Port | 633 | 814 | -22.3% | ||
Holding | ||||||
Xia Men Bay | ||||||
region of | 65 | 27 | 137.7% | |||
company | Terminals | |||||
Mainland China | ||||||
Shantou Port | 314 | 709 | -55.7% | |||
South-West | Holding | |||||
region of | Zhanjiang Port | 9,087 | 9,117 | -0.3% | ||
company | ||||||
Mainland China | ||||||
Holding | HIPG | 124 | 50 | 145.6% | ||
company | ||||||
Overseas | ||||||
Joint stock | Kumport | 7 | 10 | -35.9% | ||
company | PDSA | 453 | 568 | -20.2% | ||
Total | 45,430 | 48,908 | -7.1% |
Note: 1. HIPG has included liquid bulk cargo in the statistics of its business volume since 2020; 2. Discrepancies between totals and sums of sub-items listed are due to rounding.
Pearl River Delta region
The Company's terminals in West Shenzhen Port Zone handled a total container throughput of 11.84 million TEUs, up by 3.6% year-on-year. Bulk cargo volume handled amounted to 18.07
29
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
million tons, up by 39.0% year-on-year. Chu Kong River Trade Terminal handled a total container throughput of 1.06 million TEUs and a bulk cargo volume of 3.08 million tons, down by 3.4% and 12.8% year-on-year respectively, mainly due to the suspension of certain foreign trade routes affected by the pandemic. Dongguan Machong Terminal handled bulk cargo volume of 15.48 million tons, up by 26.2% year-on-year, mainly due to the significant increase in imported grains in the region. Guangdong Yide Port Limited (Shunde New Port) handled a container throughput of
0.43 million TEUs, up by 44.1% year-on-year, mainly due to the steady increase in foreign trade volume with the commencement of foreign trade business since July 2019. It also handled a bulk cargo volume of 3.95 million tons, up by 74.4% year-on-year, mainly due to further market expansion.
Yangtze River Delta region
SIPG handled a container throughput of 43.50 million TEUs, up by 0.5% year-on-year. Bulk cargo volume handled declined by 34.3% year-on-year to 75.65 million tons because of the impact of the pandemic and adjustment of business structure. Ningbo Daxie China Merchants International Terminals Co., Ltd. (Ningbo Daxie) handled a container throughput of 3.32 million TEUs, representing an increase of 0.9% year-on-year.
Bohai Rim region
Qingdao Qianwan United Container Terminal Co., Ltd. (QQCTU) handled a container throughput of 8.10 million TEUs, representing an increase of 2.2% year-on-year. Qingdao Qianwan West Port United Terminal Co., Ltd. (QQTU) handled a bulk cargo volume of 16.29 million tons, representing an increase of 4.5% year-on-year. Because the rising domestic demand for iron ore led to the increase in the foreign trade volume of iron ore, Qingdao Port Dongjiakou Ore Terminal Co., Ltd. handled a bulk cargo volume of 63.15 million tons, indicating an increase of 5.4% year-on-year. Dalian Port (PDA) Company Limited handled a container throughput of 6.54 million TEUs, representing a decrease of 36.0% year-on-year, mainly due to the impact of the pandemic and adjustment of business structure. Bulk cargo volume handled decreased by 0.6% year-on-year to 131 million tons. Due to intensifying regional competition and environmental policy, Laizhou Harbour Affairs handled a bulk cargo volume of 20.56 million tons, representing a year-on-year decrease of 9.5%. Since the Company participated in the merger of container terminals in Tianjin
30
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
which was completed in August 2019, Tianjin Port Container Terminal Co., Ltd. contributed a container throughput of 7.87 million TEUs, representing a year-on-year increase of 75.8%.
South-East region of Mainland China
Zhangzhou China Merchants Port Co., Ltd. ("Zhangzhou Port") handled a container throughput of
- million TEUs, decreased by 25.4% year-on-year, while its bulk cargo volume handled decreased by 22.3% year-on-year to 6.33 million tons, which is mainly affected by the pandemic and the environmental policies in the hinterland. Since May 2019, Xia Men Bay China Merchants Terminals Co., Ltd. (Xia Men Bay Terminals) has initiated its official operation and handled a bulk cargo volume of 0.65 million tons, up by 137.7% year-on-year. Shantou China Merchants Port Group Co., Ltd. handled a container throughput of 1.59 million TEUs, up by 18.9% year-on-year, mainly due to the growth in the volume of domestic trade containers and a bulk cargo volume of
- million tons, down by 55.7% year-on-year, dragged down by the impact of local environmental policies and the vacation of old ports.
South-West region of Mainland China
Zhanjiang Port (Group) Co., Ltd. handled a container throughput of 1.22 million TEUs, up by 10.1% year-on-year, mainly attributable to the expansion of new shipping routes and the new domestic transshipment business. It also handled a bulk cargo volume of 90.87 million tons, down by 0.3% year-on-year.
Hong Kong and Taiwan regions
Modern Terminals Limited and China Merchants Container Services Limited in Hong Kong delivered an aggregate container throughput of 5.56 million TEUs, down by 0.2% year-on-year. Kao Ming Container Terminal Corp. in Kaohsiung, China Taiwan, handled a total container throughput of 1.60 million TEUs, representing a decrease of 2.2% year-on-year.
Overseas operation
In Sri Lanka, CICT handled a container throughput of 2.93 million TEUs, up by 1.9% year-on-year; the bulk cargo volume handled by HIPG was 1.24 million tons, increased by 145.6% year-on-year, mainly due to the growth in cement business in the second half of the year. Its RO-RO volume was 0.375 million vehicles, down by 8.5% year-on-year, mainly due to the pandemic, the suspension of automobile production in Indian factories, and decline in the local vehicle imported. Container
31
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
throughput handled by LCT in Togo increased by 20.5% year-on-year to 1.36 million TEUs, which was mainly due to the transfer of some transshipment routes from regions seriously impacted by the pandemic to LCT in Togo by shipping companies. Container throughput handled by TICT in Nigeria was 0.30 million TEUs, representing a decrease of 35.3% year-on-year, mainly due to the decrease in import demand affected by the pandemic and the drop of oil prices. Given the declining import and export demand in the hinterland, PDSA in Djibouti handled a container throughput of
0.86 million TEUs, down by 6.3% year-on-year, and a bulk cargo volume of 4.53 million tons, down by 20.2% year-on-year. TL handled a container throughput of 21.13 million TEUs, up by 59.4% year-on-year, which was mainly benefitted from the container throughput handled by the new eight ports whose acquisition was completed in March 2020. Container throughput handled by Kumport in Turkey was 1.22 million TEUs, representing a decrease of 5.1% year-on-year; while bulk cargo volume handled was 70 thousand tons, down by 35.9% year-on-year, which was mainly due to the decline of marble exports affected by the pandemic. Benefitted from the increase in import and export container volume driven by the growth in the trade of agricultural and meat products, TCP in Brazil handled a container throughput of 0.98 million TEUs, up by 7.4% year-on- year.
3. Implementation of business plan during the reporting period
During the Reporting Period, the Company continued to pursue its strategic focus. It adhered to the strategic directives and the general operation philosophy of "enhancing core capability, insisting on both quality and efficiency, capitalizing on opportunities of this era, and striving to become a world's leading enterprise" with an unwavering aspiration to reinforce its foundation and made innovation with a pragmatic attitude. Striving to achieve breakthroughs in seven key aspects, namely the building of homebase ports, business expansion, innovative development, comprehensive development, operation management, capital operation, and marketing and commerce, the Company actively implemented various key tasks and maintained steady growth in all business segments in 2020.
In terms of the development of homebase ports, the Company accelerated the building of world- class ports in line with the national "Outline for the Construction of a Strong Transportation Country" and the "Guiding Opinions on the Construction of World-Class Ports" promulgated by
32
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
nine Chinese ministries. Closely following the national development strategy of Guangdong- Hong Kong-Macao Greater Bay Area. West Shenzhen Port Zone promoted high-value-added business with routes and supply chain resources and pushed forward the launch of regular night service along the Tonggu Channel as soon as possible to enhance its navigation capacity and competitiveness. As for Mawan Intelligent Port, two berths, each with a capacity of 200,000 tons, would be in place after the construction is completed, and one of the berths was delivered and accepted on 26 August, 2020. The Company will continue to develop, at full stretch, West Shenzhen Port Zone into an international leading intelligent port in Guangdong-HongKong-Macao Greater Bay Area and the world. In terms of the development of overseas homebase ports, CICT and HIPG adopted a market-oriented approach to enhance service capability and expand value-added services. They strengthened the sound momentum of growth, deepened business synergy and collaboration, improved overall planning, and established cooperation with the port segment of major shipping companies, thereby facilitating industry development and boosting regional influence.
In respect of business expansion, the Company completed the acquisition of equity interests in 8 out of 10 target terminals through TL, which is the associate company of the Company, on 26 March 2020. After completion of the investments, the Company expanded its port business into Southeast Asia, Middle East, Europe, Middle East, and the Caribbean, which further optimized its global port network.
In pursuit of innovative development, the Company proactively supported the construction of intelligent ports and the port ecosystem. As to the intelligent port development, the first berth of the Mawan Intelligent Port construction project has been delivered and accepted, and has become the first automated container terminal upgraded and transformed from a traditional multi-purpose terminal in China. The project embodied smart technology, social and economic contributions by incorporating nine major intelligent elements, namely "CM Chip", "CM ePort", artificial intelligence, 5G network application, Beidou system, automation, intelligent ports, blockchain, and green and low-carbon development. It was recognized as a key research and development project by the Ministry of Science and Technology and would be developed into a model for intelligence upgrade of traditional terminals at home and abroad. In terms of service expansion, the Company creatively developed the complex port in the Guangdong-HongKong-Macao Greater Bay Area. By
33
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
combining blockchain, big data, artificial intelligence, and cloud computing, it established the customs and logistics platform for the Greater Bay Area via technology empowerment, so as to promote the healthy and sustainable growth of cross-border trade in the region. For the incubation of business innovation, the Company took initiative to cooperate with leading Internet technology companies to explore the establishment of the open intelligent port platform. Regarding the integration between industry and finance, it invested and established China Merchants Port (Shenzhen) Industrial Innovation Private Equity Investment Fund (招商港口（深圳）产业创新私 募股权投资基金) in collaboration with China Merchants Venture, the fund of which will capitalize on the integration between the industrial and the financial sector to promote technological innovation and transformation, and then optimize the industry ecosystem.
In terms of comprehensive development, the Company took a key step forward in the implementation of the PPC model. Focusing on the Djibouti Zone and the HIPG Zone in Sri Lanka, it further improved the international network layout and the synergy among overseas businesses. Until the end of 2020, HIPG industrial park and Djibouti International Free Trade Zone have entered into contracts with 26 and 114 enterprise tenants, respectively. Despite the adverse impact of the pandemic, it made great progress in the introduction of business and investment.
In terms of operation management, the Company, guided by "empowerment, professionalism and value" and surrounded by five core elements, namely "management standard, professional team, closed-loop procedure, information system and benchmark enhancement", established an operation management system with sustainable value creation, gradually formulated standards for all functional modules, and managed to build a world-classvalue-oriented headquarters. Taking into account the strategic positioning of its various business segments, the Company, adhering to the principles of differentiation and controllable risks and pushing forward full-cycle asset management, procurement management, and performance evaluation mechanism, continuously promoted the healthy development of its subsidiaries. Besides, focusing on execution quality, the Company intensified the tasks on quality and efficiency improvement and strived to implement related measures to achieve in-depth integration between quality and efficiency improvement and strategic objectives.
34
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
In terms of capital operation, the Company promoted regularized dual-platform capital operation and adhered to the working concept of revitalizing existing assets and optimizing asset structure. It introduced Fujian Transportation Maritime Silk Road Investment and Management Co. Limited (福 建省交通海丝投资管理有限公司) as the strategic investor of HIPG, with a view to tapping into synergy by optimizing the asset profile and the corporate governance structure. Following its strategic goals, it utilized the dual platform and realized growth in asset size and profit volume through consolidating the financial statements of Ningbo Daxie and optimizing the tax structure and liability management.
In terms of marketing and commerce, the Company continued to organize and make plans of business promotion and marketing campaigns for domestic and international customers. During the pandemic, it maintained proactive communication with customers to ensure smooth business operation. Leveraging its terminal resources across Northern and Southern China, it optimized the route network and built the boutique shipping routes. It also participated in major events such as the China International Import Expo and the China Marine Economy Expo to build the brand image of CMPort.
II Core Business Analysis
1. Overview
Changes in key financial indicators in the Reporting Period are as follows:
Unit: RMB | ||||
Item | 2020 | 2019 | Change (%) | Reason for the change |
The adding of entities to the | ||||
Operating revenue | 12,618,529,996.02 | 12,123,829,423.74 | 4.08% | consolidated financial statements |
for the current year | ||||
The adding of entities to the | ||||
Cost of sales | 7,873,749,854.85 | 7,648,920,919.71 | 2.94% | consolidated financial statements |
for the current year | ||||
The adding of entities to the | ||||
Administrative expense | 1,584,882,935.02 | 1,509,520,581.66 | 4.99% | consolidated financial statements |
for the current year | ||||
Decrease in financing costs and | ||||
Finance costs | 1,232,729,624.82 | 1,936,269,737.53 | -36.33% | increase in exchange gains in the |
current year |
35
China Merchants Port Group Co., Ltd. | Annual Report 2020 | |||||||
Asset disposal income | Transfer | of | land | to | the | |||
1,489,206,502.32 | 4,794,562,782.79 | -68.94% | ||||||
government in last year | ||||||||
Net cash generated | ||||||||
from/used in operating | 5,495,800,917.01 | 5,501,873,415.94 | -0.11% | - | ||||
activities |
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB | |||||||
2020 | 2019 | ||||||
As % of total | As % of total | Change | |||||
Operating revenue | operating | Operating revenue | operating revenue | (%) | |||
revenue (%) | (%) | ||||||
Total | 12,618,529,996.02 | 100% | 12,123,829,423.74 | 100% | 4.08% | ||
By operating division | |||||||
Port operations | 12,047,724,502.59 | 95.48% | 11,547,072,185.86 | 95.24% | 4.34% | ||
Bonded | |||||||
logistics | 417,391,441.86 | 3.31% | 411,410,069.19 | 3.39% | 1.45% | ||
service | |||||||
Property | |||||||
development | 153,414,051.57 | 1.22% | 165,347,168.69 | 1.36% | -7.22% | ||
and investment | |||||||
By operating segment | |||||||
Mainland | |||||||
China, Hong | 9,117,570,900.78 | 72.26% | 8,872,027,132.24 | 73.18% | 2.77% | ||
Kong and | |||||||
Taiwan | |||||||
Other | |||||||
countries and | 3,500,959,095.24 | 27.74% | 3,251,802,291.50 | 26.82% | 7.66% | ||
regions |
- Operating Division, Product Category or Operating Segment Contributing over 10% of Operating Revenue or Operating Profit
Unit: RMB
YoY | ||||||
Gross | YoY change | YoY change | change in | |||
gross | ||||||
Operating revenue | Cost of sales | profit | in operating | in cost of | ||
profit | ||||||
margin | revenue (%) | sales (%) | ||||
margin | ||||||
(%) | ||||||
By operating division | ||||||
Port | 12,047,724,502.59 | 7,407,129,837.37 | 38.52% | 4.34% | 3.08% | 0.75% |
operations | ||||||
By operating segment |
36
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
Mainland | |||||||
China, Hong | 9,117,570,900.78 | 6,080,095,490.47 | 33.31% | 2.77% | 1.87% | 0.59% | |
Kong and | |||||||
Taiwan | |||||||
Other | |||||||
countries and | 3,500,959,095.24 | 1,793,654,364.38 | 48.77% | 7.66% | 6.73% | 0.45% | |
regions |
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
□ Yes √ No
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
Unit: RMB | |||||||
2020 | 2019 | ||||||
Operating | Item | As % of total | As % of total | Change | |||
division | Cost of sales | cost of sales | Cost of sales | cost of sales | (%) | ||
(%) | (%) | ||||||
Loading | |||||||
Port | and | 7,407,129,837.37 | 94.07% | 7,185,667,723.72 | 93.94% | 3.08% | |
operations | unloading | ||||||
services | |||||||
Bonded | Logistics | ||||||
logistics | 245,350,697.54 | 3.12% | 240,230,706.61 | 3.14% | 2.13% | ||
service | |||||||
service | |||||||
Property | |||||||
development | Properties | 221,269,319.94 | 2.81% | 223,022,489.38 | 2.92% | -0.79% | |
and | |||||||
investment | |||||||
Total | 7,873,749,854.85 | 100.00% | 7,648,920,919.71 | 100.00% | 2.94% | ||
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
Ningbo Daxie China Merchants International Container Terminal Co., Ltd. (CMICT) was added to the consolidated financial statements of the Company for the Reporting Period due to the business
37
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
combination of the Company and CMICT which were not under common control.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers Major customers:
Total sales to top five customers (RMB) | 3,455,856,420.54 |
Total sales to top five customers as % of total sales of | 27.39% |
the Reporting Period (%) | |
Total sales to related parties among top five customers | 2.71% |
as % of total sales of the Reporting Period (%) | |
Top five customers:
Sales revenue | |||
No. | Customer | contributed for the | As % of total sales revenue (%) |
Reporting Period (RMB) | |||
1 | Customer A | 1,589,271,780.94 | 12.59% |
2 | Customer B | 617,460,483.80 | 4.89% |
3 | Customer C | 561,057,263.91 | 4.45% |
4 | Customer D | 346,126,608.76 | 2.74% |
5 | Customer E | 341,940,283.12 | 2.71% |
Total | -- | 3,455,856,420.54 | 27.39% |
Other information about major customers:
The company has an associated relationship with China COSCO Shipping Group Co., Ltd. among the top five customers. Fu Gangfeng, the original chairman of the company (resigned as the chairman of the company on January 31, 2020, less than 12 months after his resignation) served as China Director and General Manager of Ocean Shipping Group Co., Ltd. Except for the above- mentioned related relationships, the company and its directors, supervisors, senior managers, core technical personnel, shareholders holding more than 5% of the shares and other related parties have no direct or indirect interest in China COSCO Shipping Group Co., Ltd.
Major suppliers:
Total purchases from top five suppliers (RMB)
Total purchases from top five suppliers as % of total purchases of the Reporting Period (%)
Total purchases from related parties among top five suppliers as % of total purchases of the
914,089,834.55
17.02%
0.00%
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | |||||
Reporting Period (%) | ||||||
Top five suppliers: | ||||||
No. | Supplier | Purchase in the | As % of total purchases (%) | |||
Reporting Period (RMB) | ||||||
1 | Supplier A | 331,650,786.48 | 6.17% | |||
2 | Supplier B | 180,249,953.38 | 3.36% | |||
3 | Supplier C | 169,857,064.55 | 3.16% | |||
4 | Supplier D | 119,928,727.26 | 2.23% | |||
5 | Supplier E | 112,403,302.88 | 2.09% | |||
Total | -- | 914,089,834.55 | 17.02% |
Other information about major suppliers: □ Applicable √ Not applicable
3. Expense
Unit: RMB | ||||||
2020 | 2019 | Change | Reason for any significant | |||
(%) | change | |||||
Administrative | 1,584,882,935.02 | 1,509,520,581.66 | 4.99% | - | ||
expense | ||||||
Increase in exchange gains as a | ||||||
result of exchange rate changes, | ||||||
Finance costs | 1,232,729,624.82 | 1,936,269,737.53 | -36.33% | and increase in interest income | ||
due to the new US dollar loan | ||||||
to TL | ||||||
R&D expense | 156,024,113.54 | 123,853,344.29 | 25.97% | Higher expenses on various | ||
R&D projects | ||||||
4. R&D Investments
In 2020, the Company made active efforts to promote intelligent ports and build a port ecosystem. As the first automated terminal in China which is upgraded from a traditional bulk cargo terminal, Mawan Intelligent Port has seen its Berth No. 3 successfully delivered. Being a combination of nine intelligent factors, namely intelligent technologies, social and economic benefits, the integrated "CMCore", "CM ePort", artificial intelligence, the application of 5G network, the Beidou System, automation, intelligent port, and blockchain, as well as green and low-carbon development, the port is considered a model for the automation of traditional ports at home and abroad. In terms of service extension, the innovative business model of complex port is launched for the Guangdong-Hong
39
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Kong-Macao Greater Bay Area. Through the comprehensive application of technologies such as blockchain, big data, artificial intelligence and cloud computing, an innovative customs clearance logistics platform is put in place for the Greater Bay Area to facilitate the healthy and sustainable development of cross-board trade in the area. With respect to business innovation and development, the Company actively cooperates with Internet technology tycoons to explore the construction of an open intelligent port platform.
Details about R&D investments:
2020 | 2019 | Change (%) | |
Number of R&D | 874 | 611 | 43.04% |
personnel | |||
R&D personnel as % of | 6.06% | 4.29% | 1.77% |
total employees | |||
R&D investments (RMB) | 209,496,430.84 | 155,131,267.35 | 35.04% |
R&D investments as % | 1.66% | 1.28% | 0.38% |
of operating revenue | |||
Capitalized R&D | 53,472,317.30 | 31,277,923.06 | 70.96% |
investments (RMB) | |||
Capitalized R&D | |||
investments as % of total | 25.52% | 20.16% | 5.36% |
R&D investments |
Reasons for any significant YoY change in the percentage of R&D investments in operating revenue: □ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D investments and rationale: □ Applicable √ Not applicable
5. Cash Flows
Unit: RMB | ||||
Item | 2020 | 2019 | Change (%) | |
Subtotal of cash generated from | 13,560,142,641.73 | 13,483,810,093.83 | 0.57% | |
operating activities | ||||
Subtotal of cash used in operating | 8,064,341,724.72 | 7,981,936,677.89 | 1.03% | |
activities | ||||
Net cash generated from/used in | 5,495,800,917.01 | 5,501,873,415.94 | -0.11% | |
operating activities | ||||
Subtotal of cash generated from | 12,531,582,996.10 | 11,616,175,588.24 | 7.88% | |
investing activities | ||||
Subtotal of cash used in investing | 19,424,700,092.60 | 13,553,166,249.84 | 43.32% |
40
China Merchants Port Group Co., Ltd. | Annual Report 2020 | |||
activities | ||||
Net cash generated from/used in | -6,893,117,096.50 | -1,936,990,661.60 | -255.87% | |
investing activities | ||||
Subtotal of cash generated from | 37,578,675,786.12 | 18,233,144,655.78 | 106.10% | |
financing activities | ||||
Subtotal of cash used in financing | 32,184,203,323.64 | 19,466,847,993.77 | 65.33% | |
activities | ||||
Net cash generated from/used in | 5,394,472,462.48 | -1,233,703,337.99 | 537.26% | |
financing activities | ||||
Net increase in cash and cash | 4,057,461,307.33 | 2,340,876,491.12 | 73.33% | |
equivalents | ||||
Explanation of why any of the data above varies significantly on a year-on-year basis:
Subtotal of cash used in investing activities rose 43.32% year-on-year, primarily driven by the payment for the mandatory convertible bonds of TL and an increase in investments in other companies.
Net cash generated from investing activities declined 255.87% year-on-year, primarily driven by a year-on-year increase in cash used in investing activities.
Subtotal of cash generated from financing activities rose 106.10% year-on-year, primarily driven by changes in the financings for investment projects.
Subtotal of cash used in financing activities rose 65.33% year-on-year, primarily driven by a year- on-year increase in cash repayments of borrowings.
Net cash generated from financing activities rose 537.26% year-on-year, primarily driven by a much faster growth in cash generated from financing activities than in cash used in financing activities.
The net increase of cash and cash equivalents rose 73.33% year-on-year, primarily driven by the comprehensive influence of each activity of cash flows.
Explanation of why net cash generated from/used in operating activities varies significantly from net profit of the Reporting Period:
□ Applicable √ Not applicable
III. Analysis of Non-main Businesses
Unit: RMB | |||||
Amount | As % of | Main source/reason | Exceptional or recurrent |
41
China Merchants Port Group Co., Ltd. | Annual Report 2020 | |||||
total profit | ||||||
Investment | Share of the profit of joint | |||||
4,905,975,438.22 | 72.13% | ventures and | associates, | Recurrent | ||
income | ||||||
mainly Shanghai Port | ||||||
Gain/loss on | Compensation | income of | ||||
disposal of | 1,489,206,502.32 | 21.90% | Exceptional | |||
land readjustment | ||||||
assets | ||||||
IV. Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Indicate whether the Company has adopted the new accounting standards governing revenue and leases since 2020 and restated the beginning amounts of relevant financial statement line items in the year.
□ Applicable | √ Not applicable | |||||||
Unit: RMB | ||||||||
31 December 2020 | 1 January 2020 | Change in | ||||||
As % of | As % of | Reason for any | ||||||
Amount | Amount | percentag | ||||||
total | total | e (%) | significant change | |||||
assets | assets | |||||||
Funds pooled for project | ||||||||
Monetary | payment in 2021 and | |||||||
11,791,424,734.63 | 7.00% | 7,734,948,210.26 | 4.94% | 2.06% | repayment of bank | |||
assets | ||||||||
borrowings in the | ||||||||
beginning of the year | ||||||||
Other | 3,557,195,461.26 | 2.11% | 2,129,378,252.50 | 1.36% | 0.75% | Land compensation | ||
receivables | ||||||||
Other current | 433,666,201.42 | 0.26% | 2,298,792,661.70 | 1.47% | -1.21% | Maturity of structured | ||
assets | deposit | |||||||
Long-term | 3,887,949,993.10 | 2.31% | 1,098,831,799.90 | 0.70% | 1.61% | New loan financing for | ||
receivables | project | |||||||
Acquisition of 8 | ||||||||
Long-term | terminals from CMA, | |||||||
equity | 66,231,923,423.45 | 39.30% | 57,916,539,383.26 | 36.96% | 2.34% | investment in Northeast | ||
investments | Asia Investment, and | |||||||
consolidation of CMICT | ||||||||
Other non- | Consolidation of CMICT | |||||||
current | 910,807,452.56 | 0.54% | 2,385,363,537.39 | 1.52% | -0.98% | |||
in the current year | ||||||||
financial assets | ||||||||
Transfer of the | ||||||||
Construction in | Guangdong-Macau | |||||||
5,381,430,606.18 | 3.19% | 6,334,141,441.88 | 4.04% | -0.85% | Phase II project of | |||
progress | ||||||||
Shantou Port to fixed | ||||||||
assets | ||||||||
Goodwill | 6,675,939,930.13 | 3.96% | 8,023,659,694.81 | 5.12% | -1.16% | Goodwill impairment | ||
allowances | ||||||||
Current portion | Repayment of mature | |||||||
of non-current | 3,564,465,137.37 | 2.11% | 6,104,339,856.79 | 3.90% | -1.79% | |||
borrowings | ||||||||
liabilities | ||||||||
Other current | Issue of short-term | |||||||
2,383,668,985.94 | 1.41% | 885,956,581.63 | 0.57% | 0.84% | commercial papers to | |||
liabilities | ||||||||
raise financings | ||||||||
Long-term | 1,228,461,573.69 | 0.73% | 1,935,245,003.21 | 1.24% | -0.51% | Decrease in rebates of |
42
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
payables | port construction fees |
2. Assets and Liabilities at Fair Value
Unit: RMB | ||||||||
Cumulative | Impair | |||||||
Gain/loss on | -ment | |||||||
fair-value | ||||||||
Item | Beginning amount | fair-value | allowance | Purchased in the | Sold in the | Other changes | Ending balance | |
changes in the | changes | for the | Reporting Period | Reporting Period | ||||
charged to | ||||||||
Reporting Period | Reporting | |||||||
equity | Period | |||||||
Financial | ||||||||
assets | ||||||||
Held-for- | ||||||||
trading | ||||||||
financial | ||||||||
assets | 2,385,363,537.39 | 269,099,721.85 | - | - | 2,625,398,611.55 | -310,000,000.00 | -3,208,888,969.64 | 1,760,972,901.15 |
(excluding | ||||||||
derivative | ||||||||
financial | ||||||||
assets) | ||||||||
Other | ||||||||
equity | 163,561,272.00 | - | 216,691.00 | - | - | - | 17,689,094.74 | 181,467,057.74 |
instrument | ||||||||
investment | ||||||||
Subtotal of | ||||||||
financial | 2,548,924,809.39 | 269,099,721.85 | 216,691.00 | - | 2,625,398,611.55 | -310,000,000.00 | -3,191,199,874.90 | 1,942,439,958.89 |
assets | ||||||||
Receivables | 260,760,537.45 | - | - | - | - | - | -43,310,571.04 | 217,449,966.41 |
financing | ||||||||
Total of the | 2,809,685,346.84 | 269,099,721.85 | 216,691.00 | - | 2,625,398,611.55 | -310,000,000.00 | -3,234,510,445.94 | 2,159,889,925.30 |
above | ||||||||
Financial | 4,059,686,208.87 | -680,381,987.28 | - | - | - | -741,328,044.50 | 250,419,464.44 | 2,888,395,641.53 |
liabilities | ||||||||
Details of other changes:
N/A
Significant changes to the measurement attributes of the major assets in the Reporting Period: □ Yes √ No
3. Restricted Asset Rights as at the Period-End
The restricted monetary assets were RMB11,528,570.90 of security deposits.
The carrying value of fixed assets as collateral for bank loans was RMB341,931,071.09.
The carrying value of construction in progress as collateral for bank loans was RMB43,751,101.60; and the carrying value of intangible assets as collateral for bank loans was RMB218,825,477.36. The carrying value of equities and interests collateral for bank loans was RMB2,485,702,767.56.
43
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
V. Investments Made
1. Total Investment Amount
Amount in 2020 (RMB) | Amount in 2019 (RMB) | Change (%) | |||||||||||||||||
Equity investment | 5,706,331,715.60 | 7,898,674,384.09 | -27.76% | ||||||||||||||||
Non-equity investment | 2,728,598,026.38 | 3,515,540,735.97 | -22.38% | ||||||||||||||||
2. Major Equity Investments Made in the Reporting Period | |||||||||||||||||||
Unit: RMB'0,000 | |||||||||||||||||||
Way | Investment | Return on | Any | Disclos | Index to | ||||||||||||||
Investme | The | Anticip | investmen | legal | |||||||||||||||
Name of | of | Funding | Joint | Term of | Type of | progress as at | ure | disclosed | |||||||||||
Investee | Principal activity | invest | nt | Company | source | investor | investment | products | the balance | ated | t in the | matter | date (if | information | |||||
ment | amount | 's interest | sheet date | income | Reporting | involv | any) | (if any) | |||||||||||
Period | ed | ||||||||||||||||||
Investment and | |||||||||||||||||||
asset | |||||||||||||||||||
management; | |||||||||||||||||||
land | |||||||||||||||||||
development | |||||||||||||||||||
services; | |||||||||||||||||||
industrial park | |||||||||||||||||||
management | |||||||||||||||||||
services; supply | |||||||||||||||||||
of power, heating | |||||||||||||||||||
and water; | |||||||||||||||||||
engineering | |||||||||||||||||||
management | Term of | ||||||||||||||||||
services; | Liaonin | www.cninf | |||||||||||||||||
operation: | |||||||||||||||||||
Northeast | property | Incor | Self- | g Port | 50 years, | 7 Apr. | o.com.cn | ||||||||||||
Asia | management; | porat | 100,000 | 22.22% | funded | Group | renewable | Equity | Completed | 0.00 | 778.63 | No | 2020 | (Announce | |||||
Investment | plant leases; | ed | and | upon | ment No . | ||||||||||||||
meeting, | CMSK | 2020-025) | |||||||||||||||||
expiry | |||||||||||||||||||
exhibition and | |||||||||||||||||||
related services; | |||||||||||||||||||
business | |||||||||||||||||||
management | |||||||||||||||||||
consulting | |||||||||||||||||||
services. (where | |||||||||||||||||||
an administrative | |||||||||||||||||||
permit is | |||||||||||||||||||
required | |||||||||||||||||||
according to law, | |||||||||||||||||||
it must be | |||||||||||||||||||
obtained before | |||||||||||||||||||
operation.) | |||||||||||||||||||
CMPort | Investing in | ||||||||||||||||||
(Shenzhen | equities of non- | China | |||||||||||||||||
) Industrial | listed and listed | Mercha | |||||||||||||||||
Innovation | port-related | nts | www.cninf | ||||||||||||||||
Private | companies with | Incor | Venture | Term of | |||||||||||||||
o.com.cn | |||||||||||||||||||
Equity | respect to | Self- | and | 1 Dec. | |||||||||||||||
Investment | technology | porat | 30,000 | 49.99% | funded | China | Fund: 7 | Equity | Ongoing | 0.00 | 0.00 | No | 2020 | (Announce | |||||
Fund | innovation, | ed | Mercha | years | ment No . | ||||||||||||||
2020-085) | |||||||||||||||||||
Partnershi | business model | nts | |||||||||||||||||
p (Limited | innovation, trade | Venture | |||||||||||||||||
Partnershi | digitalization, | Fund | |||||||||||||||||
p) | etc. | ||||||||||||||||||
Total | -- | -- | 130,000 | -- | -- | -- | -- | -- | -- | 0.00 | 778.63 | -- | -- | -- |
44
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
3. Major Non-Equity Investments Ongoing in the Reporting Period
Unit: RMB
Accumula | Reason for | |||||||||
Fixed | tive | not | ||||||||
Way | reaching | |||||||||
assets | Input amount in | Accumulative actual | Estimated | realized | ||||||
of | Industry | Capital | the | |||||||
Item | investm | the Reporting | input amount as of the | Progress | return on | revenues | ||||
invest | involved | resources | schedule | |||||||
ment | ent or | Period | period-end | investment | as of the | and | ||||
not | period- | |||||||||
anticipated | ||||||||||
end | ||||||||||
income | ||||||||||
Haixing | ||||||||||
Harbor 1#- | Support | |||||||||
4# berths | Self-funded | |||||||||
Self- | activities for | |||||||||
renovation | Yes | 485,237,057.61 | 1,544,226,816.60 | and loan- | 54.16% | 0.00 | 0.00 | N/A | ||
built | water | |||||||||
project- | funded | |||||||||
transportation | ||||||||||
water | ||||||||||
engineering | ||||||||||
HIPG | ||||||||||
container | ||||||||||
and oil | Support | Self-funded | ||||||||
terminals | Self- | activities for | 143,384,534.55 | 1,550,440,336.85 | 56.00% | 0.00 | 0.00 | |||
Yes | and loan- | N/A | ||||||||
and tank | built | water | ||||||||
funded | ||||||||||
zone | transportation | |||||||||
renovation | ||||||||||
project | ||||||||||
Machong | ||||||||||
Port 2# and | ||||||||||
3# berths | Support | Self-funded | ||||||||
and bulk | Self- | activities for | 165,851,858.79 | 487,050,717.25 | 78.56% | 0.00 | 0.00 | |||
Yes | and loan- | N/A | ||||||||
grain | built | water | ||||||||
funded | ||||||||||
warehouse | transportation | |||||||||
phase III | ||||||||||
project | ||||||||||
Zhanjiang | ||||||||||
Port | Support | Self-funded | ||||||||
Xiashan | Self- | activities for | 230,330,096.08 | 464,639,005.10 | 62.98% | 0.00 | 0.00 | |||
Yes | and loan- | N/A | ||||||||
Port | built | water | ||||||||
funded | ||||||||||
General | transportation | |||||||||
Wharf | ||||||||||
General | ||||||||||
Cargo | Support | |||||||||
project of | Self-funded | |||||||||
Self- | activities for | |||||||||
Zhanjiang | Yes | 112,037,664.03 | 366,583,393.31 | and loan- | 40.49% | 0.00 | 0.00 | N/A | ||
built | water | |||||||||
Port | funded | |||||||||
transportation | ||||||||||
Donghai | ||||||||||
Island | ||||||||||
Total | -- | -- | -- | 1,136,841,211.06 | 4,412,940,269.11 | -- | -- | 0.00 | 0.00 | -- |
4. Financial Investments
(1) Securities Investments
Unit: RMB
Va | Ac | ||||||||||||
cou | Ac | Ca | |||||||||||
rie | Na | nti | Sold | ||||||||||
Cumulative | co | pit | |||||||||||
ty | me | ng | Gain/loss on fair | in the | |||||||||
Code of | fair value | Gain/loss in the | un | al | |||||||||
of | securiti | of | Initial investment | me | Beginning carrying | value changes in | changes | Purchased in the | Repo | Reporting | Ending carrying | tin | res |
se | es | sec | cost | asu | value | the Reporting | recorded into | Reporting Period | rting | Period | value | g | ou |
cu | urit | re | Period | Perio | |||||||||
equity | ite | rce | |||||||||||
riti | ies | me | d | ||||||||||
m | s | ||||||||||||
es | nt | ||||||||||||
mo |
45
China Merchants Port Group Co., Ltd. | Annual Report 2020 | |||||||||||||
del | ||||||||||||||
Do | Tr | |||||||||||||
me | ||||||||||||||
Fai | adi | |||||||||||||
sti | ||||||||||||||
r | ng | Se | ||||||||||||
c/o | Nin | |||||||||||||
val | fin | lf- | ||||||||||||
ve | gbo | 592,183,095.14 | 1,548,914,671.20 | 183,843,813.95 | - | 1,465,398,611.55 | - | 52,532,104.65 | - | |||||
601018 | ue | an | ow | |||||||||||
rse | Por | |||||||||||||
as | t | me | cia | ne | ||||||||||
tho | l | d | ||||||||||||
St | ||||||||||||||
d | ass | |||||||||||||
oc | ||||||||||||||
ets | ||||||||||||||
k | ||||||||||||||
Do | Tr | |||||||||||||
me | ||||||||||||||
Fai | adi | |||||||||||||
sti | ||||||||||||||
Qin | r | ng | Se | |||||||||||
c/o | ||||||||||||||
gda | val | fin | lf- | |||||||||||
ve | 06198 | 124,405,138.80 | 204,263,917.11 | -27,141,455.82 | - | - | - | 8,036,071.58 | 166,225,139.77 | |||||
o | ue | an | ow | |||||||||||
rse | Por | me | cia | ne | ||||||||||
as | ||||||||||||||
t | tho | l | d | |||||||||||
St | ||||||||||||||
d | ass | |||||||||||||
oc | ||||||||||||||
ets | ||||||||||||||
k | ||||||||||||||
Do | Tr | |||||||||||||
me | ||||||||||||||
Fai | adi | |||||||||||||
sti | ||||||||||||||
Qin | r | ng | Se | |||||||||||
c/o | ||||||||||||||
gda | val | fin | lf- | |||||||||||
ve | 601298 | 331,404,250.30 | 616,000,000.00 | 104,160,000.00 | - | - | - | 22,433,600.00 | 720,160,000.00 | |||||
o | ue | an | ow | |||||||||||
rse | Por | me | cia | ne | ||||||||||
as | ||||||||||||||
t | tho | l | d | |||||||||||
St | ||||||||||||||
d | ass | |||||||||||||
oc | ||||||||||||||
ets | ||||||||||||||
k | ||||||||||||||
Ot | ||||||||||||||
he | ||||||||||||||
Do | r | |||||||||||||
eq | ||||||||||||||
me | ||||||||||||||
Fai | uit | |||||||||||||
sti | Jian | |||||||||||||
r | y | Se | ||||||||||||
c/o | gsu | |||||||||||||
val | ins | lf- | ||||||||||||
ve | 600377 | Exp | 1,120,000.00 | 11,220,000.00 | - | -324,900.00 | - | - | 460,000.00 | 10,786,800.00 | ||||
ue | tru | ow | ||||||||||||
rse | ress | me | me | ne | ||||||||||
as | wa | |||||||||||||
tho | nt | d | ||||||||||||
St | y | |||||||||||||
d | in | |||||||||||||
oc | ||||||||||||||
ve | ||||||||||||||
k | ||||||||||||||
st | ||||||||||||||
me | ||||||||||||||
nt | ||||||||||||||
Ot | ||||||||||||||
he | ||||||||||||||
Do | r | |||||||||||||
eq | ||||||||||||||
me | ||||||||||||||
Fai | uit | |||||||||||||
sti | ||||||||||||||
Petr | r | y | Se | |||||||||||
c/o | ||||||||||||||
och | val | ins | lf- | |||||||||||
rseve | 400032 | 3,500,000.00 | 382,200.00 | - | - | - | - | - | 382,200.00 | |||||
emi | ue | tru | ow | |||||||||||
as | cal | me | me | ne | ||||||||||
A1 | tho | nt | d | |||||||||||
St | ||||||||||||||
d | in | |||||||||||||
oc | ||||||||||||||
ve | ||||||||||||||
k | ||||||||||||||
st | ||||||||||||||
me | ||||||||||||||
nt | ||||||||||||||
Ot | ||||||||||||||
he | ||||||||||||||
Do | r | |||||||||||||
eq | ||||||||||||||
me | ||||||||||||||
Fai | uit | |||||||||||||
sti | ||||||||||||||
r | y | Se | ||||||||||||
c/o | Gu | |||||||||||||
val | ins | lf- | ||||||||||||
ve | 400009 | ang | 27,500.00 | 17,000.00 | - | - | - | - | - | 17,000.00 | ||||
ue | tru | ow | ||||||||||||
rse | Jian | me | me | ne | ||||||||||
as | 1 | |||||||||||||
tho | nt | d | ||||||||||||
St | ||||||||||||||
d | in | |||||||||||||
oc | ||||||||||||||
ve | ||||||||||||||
k | ||||||||||||||
st | ||||||||||||||
me | ||||||||||||||
nt |
46
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||||||
Total | 1,052,639,984.24 | -- | 2,380,797,788.31 | 260,862,358.13 | -324,900.00 | 1,465,398,611.55 | 0.00 | 83,461,776.23 | 897,571,139.77 | -- | -- |
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
5. Use of Funds Raised
(1) Overall Usage of Funds Raised
Unit: RMB'0,000
Proporti | Amount | ||||||||||
on of | |||||||||||
The usage | of funds | ||||||||||
Total funds | Accumulativ | accumul | |||||||||
Way | Total funds | and | raised | ||||||||
Year | of | Total funds | used in the | Accumulativ | with usage | e funds with | ative | Total unused | destination | idle for | |
raising | raised | Current | e fund used | changed | usage | funds | funds | of unused | over | ||
Period | changed | with | |||||||||
funds | two | ||||||||||
usage | |||||||||||
years | |||||||||||
changed | |||||||||||
Private | Deposited | ||||||||||
in funds | |||||||||||
2019 | place | 221,282.91 | 307,473.46 | 520,882.19 | 0 | 18,599.73 | 8.41% | 88,478.69 | 0 | ||
ment | raising | ||||||||||
account | |||||||||||
Total | -- | 221,282.91 | 307,473.46 | 520,882.19 | 0 | 18,599.73 | 8.41% | 88,478.69 | -- | 0 | |
Explanation of overall usage of funds raised | |||||||||||
As approved in the document "ZJXK [2018] No. 1750" of CSRC, CMPort issued 128,952,746 RMB ordinary shares (A Share) at RMB 17.16 per share through private placement on Shenzhen Stock Exchange. The total fund raised was RMB2,212,829,121.36, and after deducting fees associated with the issuance of shares, the net fund raised was RMB2,185,997,340.15. As of 23 October 2019, the aforementioned fund was fully paid, which was verified by BDO China Shu Lun Pan Certified Public Accounts LLP with a capital verification report (XKSBZ [2019] No. ZI10673). As of 31December 2020, a total of RMB5,208,821,925.44 in the Company's fund account had been used, including: (1) RMB582,722,414.48 for replacing the self-funding spent on fundraising investment projects in advance; (2) RMB749,267,729.75 as raised fund invested after the fund was paid, including an investment of RMB749,267,729.75 in the Haixing Harbor renovation project (Phase II) (2019: RMB324,533,139.29; 2020: RMB424,734,590.46); (3) RMB26,831,781.21 for paying issue fees; (4) RMB3,850,000,000.00 for purchasing structured deposits (2019: RMB1,200,000,000.00; 2020: RMB2,650,000,000.00). As of 31 December 2020, the net amount of interest income generated from the fund account is RMB1,938,427.36 after deducting surcharges (2019: RMB795,775.14; 2020: RMB1,142,652.22); the amount of structured deposits redeemed is RMB3,050,000,000.00 (2019: RMB100,000,000.00; 2020: RMB2,950,000,000.00); the amount of income from structured deposits is RMB28,841,232.88 (2019: RMB302,465.75; 2020: RMB28,538,767.13); as of 31 December 2020, the balance amount deposited in the fund-raising account is RMB884,786,856.16.
(2) Commitment Projects of Fund Raised
Unit: RMB'0,000
Accumulat | Investment | Whether | ||||||||
Changed or | Investment | Investme | ive | Date of | ||||||
Committed | Realized | Whether | occurred | |||||||
not | Committed | amount | nt amount | investment | schedule as | reaching | ||||
investment project | income in the | reached | significant | |||||||
(including | investment | after | in the | amount as | the period- | intended | ||||
and super raise | partial | amount | adjustment | Reporting | of the | end (3)＝ | use of the | Reporting | anticipated | changes in |
fund arrangement | Period | income | project | |||||||
changes) | (1) | Period | period-end | (2)/(1) | project | |||||
feasibility | ||||||||||
(2) | ||||||||||
Committed investment project | ||||||||||
Supporting | N/A | |||||||||
transformation | Yes | 18,599.73 | - | - | - | - | - | No | No | |
project of Han | (Note 1) | |||||||||
Port |
47
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||||||||||||
Transformation | 30 June | N/A | |||||||||||||||||
project of Haixing | No | 200,000 | 218,599.73 | 42,473.46 | 133,199.01 | 60.93% | No | No | |||||||||||
2021 | (Note 2) | ||||||||||||||||||
Harbor (Phase II) | |||||||||||||||||||
Subtotal of | |||||||||||||||||||
committed | -- | 218,599.73 | 218,599.73 | 42,473.46 | 133,199.01 | -- | -- | -- | -- | -- | |||||||||
investment project | |||||||||||||||||||
Super raise fund arrangement | |||||||||||||||||||
N/A | |||||||||||||||||||
Subtotal of super | |||||||||||||||||||
raise fund | -- | - | - | - | - | -- | -- | 0 | -- | -- | |||||||||
arrangement | |||||||||||||||||||
Total | -- | 218,599.73 | 218,599.73 | 42,473.46 | 133,199.01 | -- | -- | 0 | -- | -- | |||||||||
Note 1: Based on the estimated construction progress of supporting transformation project of Han Port, US$ 79 million and | |||||||||||||||||||
USD281 million were planned to be used to build an oil wharf and a tank area respectively in 2019 and 2020; USD12.48 million | |||||||||||||||||||
Condition and | and 179.6 million were planned to be used to acquire quay cranes, yard cranes and other operating equipment respectively in 2019 | ||||||||||||||||||
and 2020. The funds were estimated to be fully spent by 2020. So far the project has been delayed. In order to further optimize its | |||||||||||||||||||
reason for not | |||||||||||||||||||
internal resource allocation, | increase the | utilization | efficiency of | funds and | safeguard | shareholders' rights | and interests, | the | |||||||||||
reaching the | |||||||||||||||||||
Company used RMB185,997,300 of the fund raised in transformation project of Haixing Harbor (Phase II). As of 31 December | |||||||||||||||||||
schedule and | |||||||||||||||||||
2020, a total of RMB0 had been invested in supporting transformation project of Han Port. 2. Transformation project of Haixing | |||||||||||||||||||
anticipated | |||||||||||||||||||
Harbor (Phase II) is currently under construction and thus has not generated income. | |||||||||||||||||||
income (by | |||||||||||||||||||
Note 2: Due to adjustments to government planning, the delayed delivery of the Xiaoyetian site, the COVID-19 pandemic, | |||||||||||||||||||
specific items) | |||||||||||||||||||
changes to engineering design, etc. since the start of its construction, the date of reaching the intended use of the Transformation | |||||||||||||||||||
project of Haixing Harbor (Phase II) has been adjusted from Q4 2020 to Q2 2021. This project is currently under construction and | |||||||||||||||||||
thus has not generated income. | |||||||||||||||||||
Notes of | |||||||||||||||||||
condition of | |||||||||||||||||||
significant | N/A | ||||||||||||||||||
changes occurred | |||||||||||||||||||
in project | |||||||||||||||||||
feasibility | |||||||||||||||||||
Amount, usage | |||||||||||||||||||
and schedule of | N/A | ||||||||||||||||||
super raise fund | |||||||||||||||||||
Changes in | |||||||||||||||||||
implementation | N/A | ||||||||||||||||||
address of | |||||||||||||||||||
investment project | |||||||||||||||||||
Adjustment of | |||||||||||||||||||
implementation | N/A | ||||||||||||||||||
mode of | |||||||||||||||||||
investment project | |||||||||||||||||||
BDO China Shu Lun Pan Certified Public Accountants LLP verified the upfront investment with self-pooled funds in raised funds | |||||||||||||||||||
Upfront | investment projects, and issued the XKSSBZ [2019] No. 10423 The Audit Report on the Upfront Investment with Self-Pooled | ||||||||||||||||||
Funds in raised Funds Investment Project of Shenzhen Haixing Harbor Development Co., Ltd. dated 12 November 2019. As of 31 | |||||||||||||||||||
investment and | |||||||||||||||||||
October 2019, the upfront investment with self-pooled funds in raised funds investment projects amounted to RMB582.7224 | |||||||||||||||||||
transfer of | |||||||||||||||||||
million. In December 2019, pursuant to the Proposal on the Swap of Raised Funds and Upfront Investment of Self-Pooled Funds | |||||||||||||||||||
investment project | |||||||||||||||||||
approved at the 11th Extraordinary Meeting of the 9th Board of Directors in 2019, the Company has completed the swap of the | |||||||||||||||||||
aforesaid funds. | |||||||||||||||||||
Idle fund | |||||||||||||||||||
supplementing the | N/A | ||||||||||||||||||
current capital | |||||||||||||||||||
temporarily | |||||||||||||||||||
Amount of | |||||||||||||||||||
surplus in project | N/A | ||||||||||||||||||
implementation | |||||||||||||||||||
and the reasons | |||||||||||||||||||
Usage and | |||||||||||||||||||
destination of | Unused fund was deposited in the fund-raising account. | ||||||||||||||||||
unused funds | |||||||||||||||||||
Problems incurred | On 22 November 2019, the 11th Extraordinary Meeting of the 9th Board of Directors in 2019 reviewed and approved the Proposal | ||||||||||||||||||
in fund using and | on the Implementation of Cash Management by the Usage of Idle Raised Funds, which agreed the Company to carry out cash | ||||||||||||||||||
management by using idle funds of no more than RMB1.2 billion. The quota was valid within 12 months of the date when the | |||||||||||||||||||
disclosure or | said proposal was approved by the Board. And the cash management amount would be returned to the account of raised funds | ||||||||||||||||||
other condition | |||||||||||||||||||
upon the expiry. | |||||||||||||||||||
48
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
On 30 November 2020, the Second Extraordinary Meeting of the 10th Board of Directors in 2020 and the Second Extraordinary Meeting of the 10th Supervisory Committee in 2020 reviewed and approved the Proposal on the Implementation of Cash Management by the Usage of Idle Raised Funds, which agreed the Company to carry out cash management by using idle funds of no more than RMB800 million. The quota was valid within 12 months of the date when the said proposal was approved by the Board. And the cash management amount would be returned to the account of raised funds upon the expiry.
As of 31 December 2020, the Company has purchased structured deposits of RMB3,850,000,000.00 (2019: RMB1,200,000,000.00; 2020: RMB2,650,000,000.00) at CMB Shenzhen New Times Sub-branch with its temporarily idle raised funds, among which RMB3,050,000,000.00 has been redeemed (income for 2019: RMB302,465.75; income for 2020: RMB28,538,767.13), and the residual RMB800,000,000.00 was still deposited in the structured deposits account.
(3) Changes in Items of Funds Raised
Unit: RMB'0,000
Reali | Whet | Whether | |||||||
Corres | Amount of | Actual | Accumulati | zed | occurred | ||||
pondin | Investment | inco | her | significa | |||||
Items | planned | investment | ve | Date of reaching | reach | ||||
g | funds | amount in | investment | schedule | me in | ed | nt | ||
after | original | as the | intended use of the | the | changes | ||||
invested | the | amount as | antici | ||||||
changes | commit | period-end | project | Repo | in | ||||
ted | after | Reporting | the period- | (3)=(2)/(1) | rting | pated | project | ||
items | changes (1) | Period | end (2) | Perio | inco | feasibilit | |||
d | me | y | |||||||
Transform | Suppor | ||||||||
ting | |||||||||
ation | transfor | ||||||||
project of | 218,599.73 | 42,473.46 | 133,199.01 | 60.93% | 30 June 2021 | 0 | No | No | |
Haixing | mation | ||||||||
project | |||||||||
Harbor | |||||||||
of Han | |||||||||
(Phase II) | |||||||||
Port | |||||||||
Total | -- | 218,599.73 | 42,473.46 | 133,199.01 | -- | -- | 0 | -- | -- |
The usage of unused fund of RMB185.9973 million in supporting | |||||||||
transformation project of HIPG was changed to the construction of | |||||||||
transformation project of Haixing Harbor (Phase II). The matters of partial | |||||||||
Notes of reasons for changes, | changes in fund raised investment has been approved by the Proposal on Partial | ||||||||
decision-making procedures and | Changes in Usage of Fund Raised, which was reviewed and approved on the 11th | ||||||||
information disclosure (by | Extraordinary Meeting of the 9th Board of Directors in 2019 on 22 November | ||||||||
specific items) | 2019. The Announcement of Partial Changes in Usage of Fund Raised | ||||||||
(Announcement No. 2019-85) has been disclosed | on | website | |||||||
www.cninfo.com.cn on 26 November 2019. As of 31 December 2020, the | |||||||||
amount with usage changed was RMB185.9973 million. | |||||||||
Due to adjustments ofgovernment planning, the delayed delivery of the | |||||||||
Condition and reason for not | Xiaoyetian site, the COVID-19 pandemic, changes to engineering design, etc. | ||||||||
reaching the schedule and | since the start of its construction, the date of reaching the intended use of the | ||||||||
anticipated income (by specific | Transformation project of Haixing Harbor (Phase II) has been adjusted from Q4 | ||||||||
items) | 2020 to Q2 2021. This project is currently under construction and thus has not | ||||||||
generated income. | |||||||||
Notes of condition of significant | |||||||||
changes occurred in project | N/A | ||||||||
feasibility after changes |
49
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
VI. Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII. Major Subsidiaries
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company's net profit
Unit: RMB | ||||||||||||
Relat | ||||||||||||
ionsh | ||||||||||||
ip | Principal | |||||||||||
Name | with | activity | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit | ||||
the | ||||||||||||
Com | ||||||||||||
pany | ||||||||||||
Port | ||||||||||||
China | business, | |||||||||||
Merchants | bonded | 42,521,339,893.42 | ||||||||||
Port | Subsi | logistics | 140,050,855,725.44 | 92,907,480,373.35 | 7,956,928,250.59 | 5,984,205,211.47 | 5,064,412,321.79 | |||||
Holdings | diary | and | (HKD) | |||||||||
Company | property | |||||||||||
Limited | investmen | |||||||||||
t | ||||||||||||
Shanghai | Business | |||||||||||
Joint | related to | |||||||||||
Internatio | ||||||||||||
stock | port, | 23,173,674,650.00 | 155,924,749,976.52 | 95,979,599,650.80 | 26,119,460,820.07 | 10,586,267,534.26 | 9,183,403,328.66 | |||||
nal Port | ||||||||||||
comp | container | |||||||||||
(Group) | ||||||||||||
any | and | |||||||||||
Co., Ltd. | ||||||||||||
terminal | ||||||||||||
Subsidiaries obtained or disposed in the Reporting Period | ||||||||||||
Subsidiary | How subsidiary was obtained or | Effects on overall operations and | ||||||||||
disposed in the Reporting Period | operating performance | |||||||||||
Control realization to CMICT and | ||||||||||||
Ningbo Daxie China Merchants | Business combination not | under | investment income recognized of | |||||||||
International Container Terminal | long-term equity investment at fair | |||||||||||
the same control | ||||||||||||
Co., Ltd. | value under the original equity | |||||||||||
method |
Notes of major holding companies and joint stock companies
There is no information on major holding companies and joint stock companies for the Company to disclose during the Reporting Period.
50
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
VIII. Structured Bodies Controlled by the Company
- Applicable √ Not applicable
IX. Outlook for the Future Development of the Company 1. Layout and trends of the industry
Looking into 2021, the pandemic remains the most significant uncertainty. Nonetheless, with the gradual rollout of vaccines, the effect of the pandemic on global economic and social activities will diminish and the world's economy is expected to fully recover. As the economy and trade return to normal, the economic growth of developed economies will increase steadily in 2021. Subject to COVID-19 vaccine distribution progress, emerging markets and developing economies face uncertainties in economic development. The social and political turmoil in certain emerging economies will drag down economic growth, notably in regions such as the Middle East and North Africa. In January 2021, the IMF predicted the global economy to grow by 5.5% in 2021, representing an increase of 9.0% year-on-year. In particular, the developed economies will grow at 4.3%, up 9.2 percentage point as compared to that of 2020; and the emerging markets and developing economies will grow at 6.3%, up 8.7 percentage point as compared to that of 2020. Global trade volume (including goods and services) will grow by 8.1%, up 17.7 percentage points as compared to that of 2020.
The year 2021 follows China's completion of building a moderately prosperous society in 2020 and marks the first year of the "14th Five-Year" Plan and 2035 Vision. China will take the initiative to adapt to the new environment and new challenges. Adhering to the new development philosophy, it will promote high-quality economic and social development by intensifying the supply-side restructuring, paying attention to demand-side management, and establishing the new dual circulation development pattern. As the first country to witness a rapid economic rebound from the pandemic, China will continue to lead global economic recovery in 2021. According to IMF's latest report, China's economic growth rate will rebound to 8.1% in 2021, making it one of the fastest- growing major economies.
In 2021, the global container shipping market continues to face uncertainties to some extents. Supply and demand imbalance of global shipping capacity, container shortage, and port congestion will support the upward trend in the shipping market and result in a chain reaction to freight rates and schedule reliability. If the COVID-19 pandemic is brought under control over time, shipping routes, shipping capacity, and quantity supply of containers may be back to normal and the freight
51
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
rates of container transportation may decrease correspondingly. Global economic recovery, along with other positive factors, is expected to drive demand for seaborne freight.
In 2021, China will further open up its economy and implement policies and measures that favor foreign trade. Through broader, more extensive and in-depth opening up, China will establish the new dual circulation development pattern for the domestic and international economic cycles boosting each other. As the free trade zone pilot system plays an increasingly important role in innovation, trade and investment will be more convenient. Besides, the signing of the Regional Comprehensive Economic Partnership (RCEP) Agreement and the organizing of China International Import Expo will strengthen the cooperation between China and its trading partners, increasing momentum for commodity import and export and benefiting the port industry. Moreover, the ongoing progress in the construction of intelligent ports and green ports will also inject new energy into the development of the port industry.
2. Development strategies of the Company
The Company is striving to become a world-class comprehensive port service provider. The Company will firmly adhere to the strategic principle of "leveraging on its long-term strategy, tapping the current edges, driving through technology and embracing changes" and the goal of quality development to accelerate the technology-powered innovation, realize a scientific global layout with balanced development, provide first-class professional solutions, and seek more returns for shareholders, the efforts of which will in turn support the development of local economy and industries and make positive contributions to the port industry.
Firstly, in respect of domestic strategies, the Company will, by seizing the opportunities arising from the supply-side restructuring and based on "regional consolidation and enhancement of synergy", consistently seek for opportunities of consolidation and cooperation across the five major port clusters along the coastal regions, in order to further expanding and improving its domestic port network layout. The Company is expected to lead a new direction in the consolidation of regional ports with a key focus on constantly improving the quality of port development with every effort.
Secondly, in respect of overseas strategies, the Company will continue to capitalize on the opportunities arising from the national "Belt and Road" initiative promoted and the international industrial transfers, and adapt to the trend of deploying mega-vessels and forming shipping alliances. Emphasis will be placed on the development of global major hub ports and gateway ports as well as those regions with high market potential, fast-growing economy and promising development
52
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
prospect. The Company will grasp opportunities in port, logistics, and related infrastructure investment and enhance its global port network persistently.
Thirdly, in respect of innovation strategies, adhering to the principle of "driving through technology and embracing changes", the Company will continuously increase its investment in innovation and establish a foothold in the technology high ground to support the future port development. By means of technological innovation and management innovation, it will significantly enhance the efficiency and profitability of port operation and become a leading enterprise in the intelligence transformation of traditional ports. It will also enrich the comprehensive port services through business model innovation.
3. Business plans for 2021
In 2021, the Company will continuously commit itself to the overall operation philosophy of "making progress amid stability", firmly adhere to the strategic principle of "leveraging on its long- term strategy, tapping the current edges, driving through technology and embracing changes", promote quality and efficiency improvement with related measures, and implement risk prevention with a focus on system development. In pursuit of high-quality growth, it will accelerate technology-led and innovation-driven development, so as to strive towards its vision of becoming the "world-class comprehensive port service provider".
In terms of the construction of homebase ports, the Company will press ahead at full steam with the development of world-class leading ports to implement the strategy of building a strong transportation country. It will refine and optimize the future development goals and action plans for West Shenzhen Port Zone and boost comprehensive capabilities in line with the development strategy of the Guangdong-HongKong-Macao Greater Bay Area. Through better resource allocation, enhancement of the management basis, expansion of ancillary and value-added services, and improvement of service standards, it will develop a port ecosystem for win-win outcomes. At the same time, it will further incorporate intelligence elements into Mawan Intelligent Port to achieve business innovation and increase regional influence. In terms of overseas homebase ports, CICT and HIPG will continue to focus on port business and strengthen cooperation with shipping companies, so as to enhance business synergy, capitalize on the collaborative advantages between port zones, and evolve into international shipping centers in South Asia. HIPG will push forward the growth of all business segments and work on the introduction of business and investment into industrial parks.
In terms of the overseas business, the Company will stick to the overall development plan for
53
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
projects abroad, "East-West routes, South-North routes, regions along the Belt and Road Initiative". Apart from completing the delivery procedures for the remaining two terminals of CMA CGM, it will optimize the construction of the overseas management and control system and improve the operating effectiveness and efficiency of overseas projects by optimizing their management system. In the face of the current complex international dynamic, it will keep abreast of changes in the trade environment and continuously monitor port consolidation opportunities within the region.
In terms of comprehensive development, the Company will closely follow changes in the trade environment, seize opportunities brought by the adjustment of the global industrial chain, and tap into favorable policies to exploit the market. By fully integrating the resources from the port industrial chain, value chain, logistics chain, and innovation chain, it will explore the PPC comprehensive development model and seek for sustainable business development through "investment introduction to industrial parks and comprehensive land development".
In terms of innovative development, the Company will focus on innovation-driven and technology- empowered industrial transformation and upgrade. Leveraging the Development and Research Center of CMPort, it will develop the technology innovation ecosystem of CMPort and export port technology innovation programmes, with an aim to build the integrated industry, education, and research platform. Centering on the "CM Chip" platform, it will develop three leading products in the industries, including CTOS (Container Terminal Operation System), BTOS (Bulk Cargo Terminal Operation System), and LPOS (Logistic Park Operation System), to realize intelligent production and operation within the terminals. The "CM ePort" platform will innovate the service models through the improvement of the information service system of port zones and the "Port+Internet" approach, and explore and develop an open intelligent port platform.
In terms of operation management, the Company will continue to follow strategic guidance and optimize management and control. It will also further boost management and control efficiency. The Company will establish an entire lifecycle asset management system to enhance construction quality and management of major projects. By the ongoing improvement of business management standards, it will develop a world-class operating management system that creates sustainable value and a value-oriented management headquarters.
In terms of marketing and commerce, the Company will continue to cooperate with major shipping companies, optimize port environment, enhance interaction with end-customers, improve customer loyalty, and strengthen direct control and influence over cargo sources, so as to boost the market competitiveness of CMPort. In line with the national dual circulation pattern, it will establish the
54
China Merchants Port Group Co., Ltd.Annual Report 2020
interconnected system of "two ports and one shipping route" in Northern and Southern China to create synergy between these two regions, develop and upgrade new shipping routes, and encourage business collaboration of ports within all cargo regions, promoting domestic trade businesses.
Capital expenditure plans:
In 2021, the Company will formulate capital expenditure plans according to business development needs. Key investment projects include Haixing Harbor upgrade and reconstruction project, Machong Port Bulk Grain Phase III Project, Zhanjiang Port Xiashan Port General Terminal Project, and the construction of HIPG container terminal in Sri Lanka, etc.
4. Possible risks and counter measures
(1) Risk of macroeconomic fluctuations
Internationally, volatile epidemic situation, global economic fluctuation, and political turmoil cast uncertainties over the global economic and business environment. Given the continued and repeated impact of the pandemic on the global economy, the effectiveness of pandemic control measures and relief policies rolled out in various countries will affect global economic recovery. Following the pandemic, the new round of easy monetary policies will increase global debt level and emerging markets will become more vulnerable. Traditional and non-traditional risks, such as natural disasters and geopolitical uncertainties, may aggregate volatility in the international financial market. Such risks of uncertainties will shock China's foreign trade market, container shipping market, and bulk commodity demand, and pose certain challenges to the Company's overseas investment and layout planning.
Domestically, lack of a sound foundation for economic recovery, China's economic growth still faces uncertainties as a result of the pandemic, the Sino-US friction, and the effectiveness of vaccine distribution. In addition, the pandemic has accelerated the implementation of technological innovation policies in the national level and amplified the demand and urgency of the digitalization in the shipping industry.
Facing the risk of macroeconomic fluctuations, especially the risks imposed on foreign trade and import and export business by the COVID-19 pandemic and the Sino-US trade friction, the Company will take the initiative to identify and respond to changes. Firstly, it will work in full swing to support the national 14th Five-year Plan and achieve high-quality growth by facilitating transformation and upgrade of enterprises in the post-pandemic era. Secondly, it will follow the national "Belt and Road" initiative and the strategies on building a strong transportation country, developing the Guangdong-HongKong-Macao Greater Bay Area, and realizing the integrated
55
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
development of Yangtze River Delta, so as to help construct the new national dual circulation development pattern. Thirdly, it will seize the opportunities arising from a new round of high-level opening up policies to drive the sustainable development of port-related business under the economic globalization trend. Fourthly, it will enhance capacity building of risk identification, warning, and elimination, and continue to follow up on the development of the global industrial chain and trade movements to adjust business operating strategies appropriately to effectively prevent, control, and reduce external risks.
(2) Policy risks
The policy risks in the port industry can be either positive or negative to the industry. On the one hand, national strategies such as the key "Belt and Road" initiative and the development of the Guangdong-HongKong-Macao Greater Bay Area will introduce favorable policies to the industrial development; on the other hand, policies and initiatives of the government for reducing costs and improving efficiency in logistics, anti-monopoly, and environmental protection may exert pressure on the profitability of the port industry.
Facing the policy risks, on one hand, the Company will proactively practice the key "Belt and Road" initiative and a series of national strategies to seize the opportunities arising from these policies; on the other hand, in response to the negative risks, the Company will improve its operation management capability by continuously enhancing quality and efficiency and strengthening resource allocation, and will constantly optimize strategic initiatives to actively seek new profit growth driver and improve the sustainable profitability.
(3) Operation management risks
Amidst the current favorable environment of domestic and overseas regional ports integration, the Company has swiftly strengthened its main port business and successfully made investments, mergers, and acquisitions of a number of domestic and overseas ports. At the same time, the Company faces unfavorable conditions of ports in certain regions such as massive port asset investment in certain regions, relatively low operation efficiency and investment returns, and etc. The major risks include: (1) investment decision-making will be riskier and more difficult under the current complicated external environment; (2) the Company's internationalized operation management system still needs to be improved and the Company shall strengthen the benefits of integration through management output and other ways to accommodate with its own rapid development and expansion; (3) the risk control system shall be consistently established and optimized to constantly improve management efficiency.
In terms of the Company's internal operation management risks, the Company will: (1) increase customer loyalty and seize market opportunities based on three improvement elements, namely "market, resources, services"; (2) improve internal control system to take further precautions in risk
56
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
control and reinforce the stringent restrictions on internal control, ensuring effective risk identification and control and consolidating the foundation of risk control; and (3) optimize risk warning system to precisely keep abreast of the new developments with an aim to seize the prime opportunities for risk control.
X. Communications with the Investment Community such as Researches, Inquiries and Interviews
1. During the Reporting Period
Type | |||||||
Way of | of | Index to basic | |||||
Date | Place | communi | commu | Object of communication | information of | ||
cation | nicatio | researches | |||||
n party | |||||||
Industrial Securities, Changjiang | |||||||
Securities, UBS, Shanghai Life | |||||||
Insurance, | Oriental Alpha Fund, | ||||||
China Securities, China COSCO, | |||||||
CICC, Ever Bloom, Xingyin | |||||||
Fund, Huaxi Securities, Huashang | |||||||
China | Fund, Hua'an Fund, Huatai | ||||||
Securities, Sichuan Development | |||||||
16 | April | Merchants | Teleconfer | Institut | |||
Fund, Guotai Junan, GTS Fund, | |||||||
2020 | Port | encing | ion | ||||
TF Fund, CPIC, Pacific | |||||||
Building | |||||||
Securities, Pacific Assets, Ping'an | |||||||
Securities, China Merchants | Main discussions: | ||||||
Securities, | Zheshang Securities, | the basic condition | |||||
Haitong Securities, Shenwan | of operations, | ||||||
Hongyuan Securities, Green | investments made | ||||||
Court Capital, Juli Investment, | and the financial | ||||||
Western Securities | condition of the | ||||||
Company; | |||||||
China | One-on- | ||||||
Materials provided: | |||||||
Merchants | Institut | Golden Eagle Fund | |||||
29 May 2020 | one | ||||||
None | |||||||
Port | meeting | ion | Baoying Fund | ||||
Building | Index: SZSE EasyIR | ||||||
China | One-on- | (http://irm.cninfo.co | |||||
9 July 2020 | Merchants | Institut | Haitong Securities and Golden Eagle | m.cn/ircs/index) | |||
one | |||||||
Port | meeting | ion | Fund | ||||
Building | |||||||
Changjiang Securities, Huaxi | |||||||
Securities, Haitong Securities, | |||||||
China | Zheshang Securities, Huarong | ||||||
31 August | Merchants | Teleconfer | Institut | Securities, Golden Eagle Fund, | |||
2020 | Port | encing | ion | Baoying Fund, Lion Fund, Zeyuan | |||
Building | Capital, Xianhu Investment, | ||||||
Shanyuan Fund, and GHY | |||||||
Environment Water (GHY) | |||||||
57
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||||||
Investment | |||||||||||||
10 September | conference | Institut | |||||||||||
Shanghai | of | Changjiang Securities | |||||||||||
2020 | ion | ||||||||||||
securities | |||||||||||||
firm | |||||||||||||
China | Communic | ||||||||||||
22 September | Merchants | Institut | |||||||||||
ation | on | Ping An Asset Management | |||||||||||
2020 | Port | phone | ion | ||||||||||
Building | |||||||||||||
4 November | One-on- | Institut | |||||||||||
Shenzhen | one | Cinda-CBA Fund | |||||||||||
2020 | ion | ||||||||||||
meeting | |||||||||||||
Investment | |||||||||||||
11 November | conference | Institut | |||||||||||
Chengdu | of | Huaxi Securities | |||||||||||
2020 | ion | ||||||||||||
securities | |||||||||||||
firm | |||||||||||||
By | phone, | ||||||||||||
1 January, | China | or | written | ||||||||||
2020 to | inquiry (the | ||||||||||||
Merchants | Individ | ||||||||||||
31 | EasyIR | Individual investors | |||||||||||
December, | Port | platform | of | ual | |||||||||
Building | |||||||||||||
2020 | SZSE | or | |||||||||||
email) | |||||||||||||
Times of communications | 145 | ||||||||||||
Number of institutions communicated with | 50 | ||||||||||||
Number of individuals communicated with | 137 | ||||||||||||
Number of other communication parties | 0 | ||||||||||||
Tip-offs | or leakages of | substantial | supposedly-confidential information during | No | |||||||||
communications | |||||||||||||
2. Period-end to Disclosure Date | |||||||||||||
Type | |||||||||||||
Way of | of | Index to basic | |||||||||||
Date | Place | commun | commu | Object of communication | information of | ||||||||
ication | nicatio | researches | |||||||||||
n party | |||||||||||||
By | Main discussions: | ||||||||||||
phone, | |||||||||||||
the basic condition | |||||||||||||
or | |||||||||||||
of operations, | |||||||||||||
written | |||||||||||||
China | investments made | ||||||||||||
inquiry | |||||||||||||
1 January 2021 | Merch | and the financial | |||||||||||
(the | |||||||||||||
to 30 | March | ants | Individ | condition of the | |||||||||
EasyI | Individual investors | ||||||||||||
2021 | Port | ual | Company; | ||||||||||
R | |||||||||||||
Buildin | Materials provided: | ||||||||||||
platfor | |||||||||||||
g | None | ||||||||||||
m | of | ||||||||||||
Index: SZSE EasyIR | |||||||||||||
SZSE | |||||||||||||
(http://irm.cninfo.co | |||||||||||||
or | |||||||||||||
email) | m.cn/ircs/index) | ||||||||||||
Times of communications | 17 | ||||||||||||
Number of institutions communicated with | 1 | ||||||||||||
58
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||
Number of individuals communicated with | 16 | ||
Number of other communication parties | 0 | ||
Tip-offs or leakages of substantial supposedly-confidential information | during | No | |
communications | |||
59
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Part V Significant Events
I. Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)
Formulation, execution or adjustments of profit distribution policy for ordinary shareholders, especially cash dividend policy, in Reporting Period
Pursuant to the CSRC Guideline for Listed Companies No.3-Cash Dividends of Listed Companies and the Notice of CSRC on Further Implementing Matters Related to Cash Dividends of Listed Companies, the Articles of Association clarifies the specific profit distribution policy, decision- making procedures and mechanism, adjustment of profit distribution policy, implementation of profit distribution plan, and profit distribution for foreign shares. During the Reporting Period, the Company executed the profit distribution policy in strict compliance with the Articles of Association.
Special statement about the cash dividend policy
In compliance with the Company's Articles of | Yes |
Association and resolution of general meeting | |
Specific and clear dividend standard and ratio | Yes |
Complete decision-making procedure and mechanism | Yes |
Independent directors faithfully performed their duties | Yes |
and played their due role | |
Non-controlling interests are able to fully express their | |
opinion and desire and their legal rights and interests | Yes |
are fully protected | |
In case of adjusting or changing the cash dividend | |
policy, the conditions and procedures involved are in | Not applicable |
compliance with applicable regulations and transparent |
The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years (including the Reporting Period)
1. Dividend Payout Plan for 2018
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net profit attributable to the Company as the parent for 2018 and the net profit of the Company as the parent stood at RMB1, 090,418,910.77 and RMB71, 014,741.10 respectively.
- According to the Company Law and the Articles of Association of the Company, the Company set aside RMB7,101,474.11 of profit as statutory reserve. The accumulative distributable profit of the Company as the parent at the end of 2018 was RMB259,943,085.16.
- Base on the total 1,793,412,378 shares as at the end of 2018, a cash dividend of RMB1.14 (tax
60
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
included) was to be distributed for every 10 shares, totaling RMB204,449,011.09.
After the above-mentioned distribution, the retained earnings of the Company as the parent would be RMB55,494,074.07.
The Board of Directors of the Company published the implementation announcement on dividend payout for 2018 on Securities Times and Ta Kung Pao (HK) dated 3 July 2019, and completed the dividend payout for the A-share and B-share holders on 10 July 2019 and 12 July 2019 respectively.
2. Dividend Payout Plan for 2019
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net profit attributable to the Company as the parent for 2019 and the net profit of the Company as the parent stood at RMB2, 898,192,168.84 and RMB1, 031,693,987.55 respectively.
- According to the Company Law and the Articles of Association of the Company, the Company set aside RMB103,169,398.76 of profit as statutory reserve. The accumulative distributable profit of the Company as the parent at the end of 2019 was RMB983,693,068.62.
- Base on the total 1,922,365,124 shares as at the end of 2019, a cash dividend of RMB4.60 (tax included) was to be distributed for every 10 shares, totaling RMB884,287,957.04.
After the above-mentioned distribution, the retained earnings of the Company as the parent would be RMB99,405,111.58.
The Board of Directors of the Company published the implementation announcement on dividend payout for 2019 on Securities Times and Ta Kung Pao (HK) dated 9 July 2020, and completed the dividend payout for the A-share and B-share holders on 15 July 2020 and 17 July 2020 respectively.
3. Dividend Payout Plan for 2020
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net profit attributable to the Company as the parent for 2020 and the net profit of the Company as the parent stood at RMB2,065,322,969.66 and RMB2,603,450,148.53 respectively.
- According to the Company Law and the Articles of Association of the Company, the Company intends to set aside RMB260,345,014.85 of profit as statutory reserve. The accumulative distributable profit of the Company as the parent at the end of 2020 was RMB2,442,510,245.26.
61
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
- Base on the total 1,922,365,124 shares as at the end of 2020, a cash dividend of RMB3.80 (tax included) is to be distributed for every 10 shares, totaling RMB730,498,747.12.
After the above-mentioned distribution, the retained earnings of the Company as the parent will be RMB1,712,011,498.14.
The above profit distribution plan still needs to be submitted to the 2020 Annual General Meeting for approval.
Cash dividend for ordinary shareholders in the past three years (including the Reporting Period)
Unit: RMB
Net profit | Cash | ||||||
attributable to | |||||||
dividend | |||||||
ordinary | |||||||
s in other | Total cash | ||||||
Cash | shareholders of | ||||||
A as % of | forms | C as % of B | dividends | D as % of B | |||
Year | dividends (tax | the listed | |||||
B (%) | (such as | (%) | (including other | (%) | |||
inclusive) (A) | company in | ||||||
share | forms) (D) | ||||||
consolidated | |||||||
repurcha | |||||||
statements for | |||||||
se) (C) | |||||||
the year (B) | |||||||
2020 | 730,498,747.12 | 2,065,322,969.66 | 35.37% | 0.00 | 0.00% | 730,498,747.12 | 35.37% |
2019 | 884,287,957.04 | 2,898,192,168.84 | 30.51% | 0.00 | 0.00% | 884,287,957.04 | 30.51% |
2018 | 204,449,011.09 | 1,090,418,910.77 | 18.75% | 0.00 | 0.00% | 204,449,011.09 | 18.75% |
The Company was profitable in the Reporting period and the positive profits of the Company as the parent attributable to ordinary shareholders while the distribution plan of cash dividend for ordinary shareholders was not proposed.
Applicable √ Not applicable
II. Final Dividend Plan for the Reporting Period
Bonus shares/10shares (share) | 0 |
Cash dividend/10 shares (RMB) (tax inclusive) | 3.8 |
Bonus issue from capital reserves (share/10 shares) | 0 |
Share base (share) | 1,922,365,124 |
Total cash dividends (RMB) (tax inclusive) | 730,498,747.12 |
Cash dividends in other forms (such as share | 0.00 |
repurchase) (RMB) | |
Total cash dividends (including other forms) | 730,498,747.12 |
(RMB) | |
Distributable profits (RMB) | 2,442,510,245.26 |
Cash dividends (including other forms) as % of | 100% |
total profits to be distributed (%) |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Details of the cash dividends
As the Company is in the mature stage of development with significant capital expenditures arrangement, when distributing profits, the proportion of cash dividends in this profit distribution shall be 40% at least.
Details of final dividend plan for the Reporting Period
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net profit attributable to the Company as the parent for 2020 stood at RMB2,065,322,969.66 and the net profit of the Company as the parent at RMB2,603,450,148.53.
- According to the Company Law and the Articles of Association of the Company, the Company intends to set aside RMB260,345,014.85of profit as statutory reserve. The accumulative distributable profit of the Company as the parent at the end of 2020 was RMB2,442,510,245.26.
-
Base on the total 1,922,365,124 shares as at the end of 2020, a cash dividend of RMB3.80 (tax included) is to be distributed for every 10 shares, totaling RMB730,498,747.12.
After the above-mentioned distribution, the retained earnings of the Company as the parent will be RMB1,712,011,498.14. The above profit distribution plan still needs to be submitted to the 2020 Annual General Meeting for approval.
III. Fulfillment of Commitments
1. Commitments of the Company's Actual Controller, Shareholders, Related Parties, and Acquirers, as well as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end
Type of | Date of | Term of | Fulfill | |||
Commitment | Promisor | Details of commitment | commitment | |||
commitment | commitment | ment | ||||
making | ||||||
The | ||||||
commitment | ||||||
on | ||||||
safeguarding | ||||||
independenc | ||||||
e of CMPort | ||||||
is effective | ||||||
for a long | ||||||
Commitment | time; the | |||||
s on | Commitment on safeguarding independence of CMPort | commitment | ||||
CMGD | horizontal | made by CMGD and its person acting in concert | on regulating | |||
and | competition, | Broadford Global: to safeguard the independence of | 15 March | related-party | Ongoi | |
Broadfor | related-party | finance, institutions, business and personnel of CMPort | 2018 | transactions | ng | |
d Global | transaction | as well as independence and integrity of assets of | is effective | |||
and capital | CMPort. | during the | ||||
Commitment | occupation | period when | ||||
s made in | CMGD and | |||||
acquisition | its persons | |||||
documents | acting in | |||||
or | concert | |||||
shareholding | possess | |||||
alteration | control | |||||
documents | power over | |||||
the Company | ||||||
Commitment on regulating related-party transaction | The | |||||
made by CMGD and corresponding persons acting in | commitment | |||||
Commitment | concert- Broadford Global: 1. CMGD/Broadford | on | ||||
Global will make a great effort to reduce related-party | safeguarding | |||||
s on | transaction between CMGD/Broadford Global and its | independenc | ||||
CMGD | horizontal | related parties as well as CMPort. Inevitable business | e of CMPort | |||
and | competition, | dealings or transactions shall be conducted as per | 15 March | is effective | Ongoi | |
Broadfor | related-party | marketization principle and fair price and the obligation | 2018 | for a long | ng | |
d Global | transaction | of information disclosure shall be fulfilled pursuant to | time; the | |||
and capital | provisions; 2. CMGD/Broadford Global and its related | commitment | ||||
occupation | parties ensure they will strictly observe related | on regulating | ||||
stipulations of laws, regulations, normative documents | related-party | |||||
and Articles of Association of CMPort and equally | transactions | |||||
execute shareholders' rights and fulfill shareholders' | is effective |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
obligations together with other shareholders in line | during the | ||||||
with legal program as well as won't seek improper | period when | ||||||
interest with actual controller's status or damage | CMGD and | ||||||
legitimate interest of CMPort and other shareholders; 3. | its persons | ||||||
The above commitment is continuously effective | acting in | ||||||
during the period when CMGD/Broadford Global has | concert | ||||||
the right to control CMPort. In case of losses incurred | possess | ||||||
by CMGD/Broadford Global failing to fulfill the above | control | ||||||
commitment to CMPort, CMGD will bear | power over | ||||||
corresponding compensation responsibility. | the Company | ||||||
Commitment on regulating related-party transaction: 1. | |||||||
China Merchants Group will try its best to reduce | |||||||
related-party transaction between it and its related | |||||||
parties and CMPort. Inevitable business dealings or | |||||||
transactions shall be conducted as per marketization | |||||||
principle and fair price and the obligation of | |||||||
Commitment | information disclosure shall be fulfilled pursuant to | ||||||
s on | provisions; 2. China Merchants Group ensure they will | Effective | |||||
strictly observe related stipulations of laws, regulations, | |||||||
horizontal | until no- | ||||||
normative documents and Articles of Association of | |||||||
competition, | 15 March | longer to be | Ongoi | ||||
CMG | CMPort and equally execute shareholders' rights and | ||||||
related-party | 2018 | the actual | ng | ||||
transaction | fulfill shareholders' obligations together with other | controller of | |||||
shareholders in line with legal program as well as won't | |||||||
and capital | the Company | ||||||
seek improper interest with actual controller's status or | |||||||
occupation | |||||||
damage legitimate interest of CMPort and other | |||||||
shareholders; 3. The above commitment is continuously | |||||||
effective during the period when China Merchants | |||||||
Group has the right to control CMPort. In case of losses | |||||||
incurred by China Merchants Group failing to fulfill the | |||||||
above commitment to CMPort, China Merchants Group | |||||||
will bear corresponding compensation responsibility. | |||||||
1. CMPort shares obtained by purchasing assets with | |||||||
shares issued this time are forbidden to be transferred | |||||||
or transacted in the market before the latter one | |||||||
between the date arising 36 months after the date when | |||||||
CMPort shares gained by CMPID based on this | |||||||
transaction are registered under the name of CMPID | |||||||
and the date when fulfillment of compensation | |||||||
obligations set forth in the Impairment Compensation | |||||||
Agreement for Issuing Shares To Purchase Assets | |||||||
signed by and between CMPID and CMPort, separately | |||||||
and its supplementary agreement (if any) is over | |||||||
(except for repurchasing or presenting shares pursuant | |||||||
to Impairment Compensation Agreement for Issuing | |||||||
Shares To Purchase Assets and its supplementary | |||||||
agreement (if any)); 2. In case of closing price of | |||||||
Commitment | Commitment | CMPort stocks being lower than issue price for | |||||
s made in | CMPID | on restriction | consecutive 20 transaction days within 6 months after | 26 December | 25 June 2022 | Ongoi | |
time of asset | on share | completion of the transaction or such closing price | 2018 | ng | |||
restructuring | trading | being lower than issue price at the end of the 6th month | |||||
after completion of the transaction, the lockup period of | |||||||
CMPort stocks held by CMPID will be automatically | |||||||
lengthened for at least 6 months; 3. CMPort shares | |||||||
which derive from consideration shares obtained by | |||||||
CMPID based on the transaction during the lockup | |||||||
period due to CMPort distributing stock dividend and | |||||||
capital reserve converted into increased capital shall be | |||||||
subject to the commitment regarding the above | |||||||
restricted stock trade period; 4. In case that the | |||||||
transaction is placed on file for investigation and | |||||||
prosecution by judiciary authorities as well as | |||||||
registered and investigated by CSRC because false | |||||||
record, misleading statement or important omission | |||||||
happens to provided or disclosed information, CMPID | |||||||
won't transfer its shares with rights and interests at | |||||||
CMPort before case investigation conclusion is drawn; |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
5. In case that lockup period set forth in the | |||||||
commitment is inconsistent with regulatory opinions | |||||||
from securities market supervision department or | |||||||
lockup period required by related provisions, CMPID | |||||||
shall adjust the above lockup period pursuant to | |||||||
regulatory opinions from relevant securities market | |||||||
supervision department and related provisions. 6. After | |||||||
the above lockup period expires, CMPID shall observe | |||||||
provisions of laws and regulations, related rules of | |||||||
Shenzhen Stock Exchange as well as Articles of | |||||||
Association of CMPort in case of reducing shares held | |||||||
by it. | |||||||
Commitment on avoiding horizontal competition: 1. | |||||||
CMPID and other enterprise controlled by CMPID fail | |||||||
to engage in or participate in business or activity which | |||||||
is similar with and constitutes or likely constitutes | |||||||
competitive relation with main business conducted by | |||||||
CMPort and the enterprise controlled by it now; 2. | |||||||
CMPID will try its best to promote CMPID and other | |||||||
enterprise controlled by CMPID not to directly or | |||||||
indirectly engage in or participate in or assist to engage | |||||||
in or participate in any business or activity which | |||||||
constitutes or likely constitutes competitive relation | |||||||
with main business conducted by CMPort and the | |||||||
enterprise controlled by it now and in the future | |||||||
independently or together with others; 3. In case of | |||||||
discovering any new business opportunity which | |||||||
constitutes or likely constitutes direct or indirect | |||||||
competitive relation with main business of CMPort or | |||||||
the enterprise controlled by it, CMPID or CMPID and | |||||||
other enterprise controlled by it will immediately notify | |||||||
CMPort in written as well as make a great effort to | |||||||
promote such business opportunity to be provided to | |||||||
CMPort or the enterprise controlled by it firstly | |||||||
according to reasonable and fair terms and conditions; | |||||||
Commitment | 4. In case of CMPort or the enterprise controlled by it | Effective | |||||
s on | waiving such competitive new business opportunity | ||||||
until no- | |||||||
horizontal | and CMPID or/and other enterprise controlled by it | ||||||
longer to be | |||||||
competition, | engaging in such competitive business, CMPort or the | Ongoi | |||||
CMPID | 26 July 2018 | the largest | |||||
related-party | enterprise controlled by it will have the right to | ng | |||||
shareholder | |||||||
transaction | purchase any stock rights, assets or other rights and | ||||||
of the | |||||||
and capital | interests in the above competitive business from | ||||||
Company | |||||||
occupation | CMPID or/and other enterprise controlled by it once or | ||||||
several times at any moment, or CMPort will select | |||||||
entrusted operation, leasing or contract operation of | |||||||
assets or businesses of CMPID or/and other enterprise | |||||||
controlled by it in the above competitive business as | |||||||
per the mode permitted by national laws and | |||||||
regulations; 5. When CMPID and other enterprise | |||||||
controlled by it plans to transfer, sell, rent out, conduct | |||||||
licensed use of or transfer or allow to use assets and | |||||||
businesses which constitutes or likely constitutes direct | |||||||
or indirect competitive relationship with main business | |||||||
of CMPort or the enterprise controlled by it in other | |||||||
way, CMPID and other enterprise controlled by it will | |||||||
provide the right of priority assignment to CMPort or | |||||||
the enterprise controlled by it and promise to make a | |||||||
great effort to promote other enterprise controlled by | |||||||
CMPID provide CMPort or the enterprise controlled by | |||||||
it with the right of priority assignment under the above | |||||||
situation; 6. As of the date when the commitment letter | |||||||
is provided, CMPID promises to compensate all actual | |||||||
losses, damages and expenses arising from violation of | |||||||
any clause in the commitment letter by CMPID or the | |||||||
enterprise controlled by it to CMPort or the enterprise | |||||||
controlled by it. |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
Commitment on regulating related-party transaction: 1. | |||||||
CMPID and other enterprise controlled by it will make | |||||||
a great effort to avoid and reduce related-party | |||||||
transaction between CMPort and economic entity | |||||||
controlled by it; 2. CMPID and other enterprise | |||||||
controlled by it will exercise stockholder's rights in | |||||||
accordance with related provisions of relevant laws and | |||||||
regulations as well as Articles of Association of | |||||||
CMPort and fulfill the obligation of vote avoidance at | |||||||
the moment of voting for related-party transactions | |||||||
involved by CMPID and other enterprise controlled by | |||||||
it at the stockholders' meeting; 3. As for related-party | |||||||
Commitment | transaction which is inevitable or occurs due to | Effective | |||||
s on | reasonable reason, CMPID will carry out transaction | ||||||
pursuant to the principle of openness, fairness and | until no- | ||||||
horizontal | |||||||
justice for market transaction and based on fair and | longer to be | ||||||
competition, | Ongoi | ||||||
CMPID | reasonable market price, perform related-party | 26 July 2018 | the largest | ||||
related-party | ng | ||||||
transaction decision-making process and legally fulfill | shareholder | ||||||
transaction | information disclosure obligation to safeguard benefits | of the | |||||
and capital | |||||||
of CMPort and other shareholders of CMPort in line | Company | ||||||
occupation | |||||||
with provisions of laws, regulations, normative | |||||||
documents and Articles of Association of CMPort; 4. | |||||||
It's ensured that no legitimate interest of CMPort and | |||||||
other shareholders of CMPort is damaged by related- | |||||||
party transaction based on status and influence of | |||||||
CMPort; 5. CMPID will promote other enterprise | |||||||
controlled by it to observe the commitment of | |||||||
Subparagraph 1-4; 6. In case of CMPID and other | |||||||
enterprise controlled by it violating the above | |||||||
commitment, causing rights and interests of CMPort | |||||||
and its shareholders are damaged, CMPID will take | |||||||
corresponding compensation responsibility according | |||||||
to law. | |||||||
Commitment about keeping independence of CMPort: | |||||||
1. After the transaction is completed, CMPID will | |||||||
strictly observe related provisions regarding | |||||||
independence of listed Companies from CSRC and | |||||||
won't violate standard operating procedures of CMPort | |||||||
based on the first majority shareholder, conduct | |||||||
excessive intervention of operation and management | |||||||
activities of CMPort and its subsidiary, embezzle | |||||||
benefits of CMPort and its subsidiary or damage | |||||||
Commitment | legitimate interest of CMPort and other shareholders; 2. | Effective | |||||
s on | CMPID will ensure CMPort is independent from | ||||||
until no- | |||||||
horizontal | CMPID and related parties in the aspects of business, | ||||||
longer to be | |||||||
competition, | asset, finance, personnel and institution; 3. CMPID | Ongoi | |||||
CMPID | 26 July 2018 | the largest | |||||
related-party | ensures independence of CMPort, CMPID and other | ng | |||||
shareholder | |||||||
transaction | enterprise controlled by it fail to occupy capitals and | ||||||
of the | |||||||
and capital | resources of CMPort based on violation in any way and | ||||||
Company | |||||||
occupation | will strictly observe provisions of rules and regulations | ||||||
for avoiding occupation of related party funds from | |||||||
CMPort as well as related laws, regulations and | |||||||
normative documents; 4. The commitment letter takes | |||||||
effect as of the signature date of CMPID as well as is | |||||||
legally binding upon CMPID. CMPID ensures it will | |||||||
strictly fulfill various commitments in the commitment | |||||||
letter and will take corresponding legal responsibility | |||||||
for losses incurred to CMPort due to violation of | |||||||
related commitment. | |||||||
Commitment | Commitment on avoiding horizontal competition: 1. | Effective | |||||
s on | China Merchants Group and the enterprise controlled | ||||||
until no- | |||||||
horizontal | by it (excluding CMPort Holdings and the enterprise | ||||||
CMG | 26 July 2018 | longer to be | Ongoi | ||||
competition, | controlled it) fail to engage in or participate in any | ||||||
related-party | business or activity which is similar with and | the actual | ng | ||||
controller of | |||||||
transaction | constitutes or likely constitute direct or indirect | ||||||
the Company | |||||||
and capital | competitive relationship with main business conducted | ||||||
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
occupation | by CMPort and the enterprise controlled by it now; 2. | ||||||
China Merchants Group will try its best to promote | |||||||
enterprises controlled by it(except for CMPort and the | |||||||
enterprise controlled by it) not to directly or indirectly | |||||||
engage in or participate in or assist to engage in or | |||||||
participate in any business or activity which constitutes | |||||||
or likely constitutes competitive relation with main | |||||||
business conducted by CMPort and the enterprise | |||||||
controlled by it now and in the future independently or | |||||||
together with others; 3. In case of discovering any new | |||||||
business opportunity which constitutes and likely | |||||||
constitutes direct or indirect competitive relation with | |||||||
main business of CMPort or the enterprise controlled | |||||||
by it, China Merchants Group or enterprise controlled | |||||||
by it(except for CMPort and the enterprise controlled | |||||||
by it) will immediately notify CMPort in written as | |||||||
well as make a great effort to promote such business | |||||||
opportunity to be provided to CMPort or the enterprise | |||||||
controlled by it firstly according to reasonable and fair | |||||||
terms and conditions; 4. In case of CMPort or the | |||||||
enterprise controlled by it waives such competitive new | |||||||
business opportunity and China Merchants Group or | |||||||
the enterprise controlled by it (except for CMPort and | |||||||
the enterprise controlled by it) engaging in such | |||||||
competitive business, CMPort or the enterprise | |||||||
controlled by it will be entitled to purchase any | |||||||
equities, assets and other rights and interests in the | |||||||
above competitive business from China Merchants | |||||||
Group or the enterprise controlled by it (except for | |||||||
CMPort and the enterprise controlled by it) once or | |||||||
several times at any moment or CMPort will select | |||||||
entrusted operation, leasing or contract operation of | |||||||
assets or businesses of China Merchants Group or the | |||||||
enterprise controlled by it (except for CMPort and the | |||||||
enterprise controlled by it) in the above competitive | |||||||
business according to the mode permitted by national | |||||||
laws and regulations; 5. When China Merchants Group | |||||||
and the enterprise controlled by it (except for CMPort | |||||||
and the enterprise controlled by it) plans to transfer, | |||||||
sell, lease, allow to use or transfer or allow to use asset | |||||||
and business which constitutes or likely constitutes | |||||||
direct or indirect competitive relationship with main | |||||||
business of CMPort or the enterprise controlled by it in | |||||||
other way, China Merchants Group and the enterprise | |||||||
controlled by it (except for CMPort and the enterprise | |||||||
controlled by it) will provide the right of priority | |||||||
assignment for CMPort or the enterprise controlled by | |||||||
it and promise to make a great effort to promote the | |||||||
enterprise controlled by China Merchants Group to | |||||||
provide the of priority assignment for CMPort or the | |||||||
enterprise controlled by it under the above situation; 6. | |||||||
As of the date when the commitment letter is provided, | |||||||
China Merchants Group promises to compensate all | |||||||
actual losses, damages and expenses arising from | |||||||
violation of any clause in the commitment letter by | |||||||
China Merchants Group or the enterprise controlled by | |||||||
it to CMPort or the enterprise controlled by it. | |||||||
Commitment | Commitment on regulating related-party transaction: 1. | ||||||
s on | China Merchants Group and other enterprise controlled | Effective | |||||
by it will make a great effort to avoid and reduce | |||||||
horizontal | until no- | ||||||
related-party transaction between CMPort and | |||||||
CMG | competition, | 26 July 2018 | longer to be | Ongoi | |||
economic entity controlled by it; 2. China Merchants | |||||||
related-party | the actual | ng | |||||
transaction | Group and other enterprise controlled by it will | controller of | |||||
exercise stockholder's rights in accordance with related | |||||||
and capital | the Company | ||||||
provisions of relevant laws and regulations as well as | |||||||
occupation | |||||||
Articles of Association of CMPort and fulfill the | |||||||
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
obligation of vote avoidance at the moment of voting | |||||||
for related-party transactions involved by China | |||||||
Merchants Group and other enterprise controlled by it | |||||||
at the stockholders' meeting; 3. As for related | |||||||
transaction which is inevitable or occurs due to | |||||||
reasonable reason, China Merchants Group will carry | |||||||
out transaction pursuant to the principle of openness, | |||||||
fairness and justice for market transaction and based on | |||||||
fair and reasonable market price, perform related-party | |||||||
transaction decision-making process and legally fulfill | |||||||
information disclosure obligation to safeguard benefits | |||||||
of CMPort and other shareholders of CMPort in line | |||||||
with provisions of laws, regulations, normative | |||||||
documents and Articles of Association of CMPort; 4. | |||||||
It's ensured that no legitimate interest of CMPort and | |||||||
other shareholders of CMPort is damaged by related- | |||||||
party transaction based on status and influence of | |||||||
CMPort; 5. China Merchants Group promotes other | |||||||
enterprise controlled by it to observe the commitment | |||||||
set forth in Subparagraph 1-4 above; 6. In case of China | |||||||
Merchants Group and other enterprise controlled by it | |||||||
violating the above commitment, causing rights and | |||||||
interests of CMPort and its shareholders are damaged, | |||||||
China Merchants Group will take corresponding | |||||||
compensation responsibility according to law. | |||||||
Commitment about keeping independence of CMPort: | |||||||
1. After the transaction is completed, China Merchants | |||||||
Group will strictly observe related provisions regarding | |||||||
independence of listed companies from CSRC and | |||||||
won't violate standard operating procedures of CMPort | |||||||
based on actual controller's status, conduct excessive | |||||||
intervention of operation and management activities of | |||||||
CMPort and its subsidiary, embezzle benefits of | |||||||
CMPort and its subsidiary or damage legitimate interest | |||||||
of CMPort and other shareholders; 2. China Merchants | |||||||
Commitment | Group will ensure CMPort is independent from China | ||||||
s on | Merchants Group and related parties in the aspects of | Effective | |||||
horizontal | business, asset, finance, personnel and institution; 3. | until no- | |||||
CMG | competition, | China Merchants Group ensures independence of | 26 July 2018 | longer to be | Ongoi | ||
related-party | CMPort, China Merchants Group and other enterprise | the actual | ng | ||||
transaction | controlled by it fail to occupy capitals and resources of | controller of | |||||
and capital | CMPort based on violation in any way and will strictly | the Company | |||||
occupation | observe provisions of rules and regulations for avoiding | ||||||
occupation of related party funds from CMPort as well | |||||||
as related laws, regulations and normative documents; | |||||||
4. The commitment letter takes effect as of the | |||||||
signature date of China Merchants Group as well is | |||||||
legally binding upon China Merchants Group. China | |||||||
Merchants Group ensures it will strictly fulfill various | |||||||
commitments in the commitment letter and will take | |||||||
corresponding legal responsibility for losses incurred to | |||||||
listed Company due to violation of related | |||||||
commitment. | |||||||
Commitment letter about perfecting the property | |||||||
ownership certificate for land and house property of | |||||||
CMPort Holdings and the enterprise subordinate to it: | |||||||
1. China Merchants Group will spare no effort to assist, | Effective | ||||||
promote and drive CMPort Holdings and the enterprise | |||||||
until no- | |||||||
subordinate to it to standardize, perfect and solve | |||||||
CMG | Other | 26 July 2018 | longer to be | Ongoi | |||
ownership defects of properties such as land and house | |||||||
commitment | property; 2. The following situations happen to CMPort | the actual | ng | ||||
controller of | |||||||
Holdings and the enterprise subordinate to it before | |||||||
the Company | |||||||
completion of the transaction: (1) Land use right of | |||||||
ownership certificate which is being handled, the house | |||||||
property failing to be timely handled (except for results | |||||||
incurred by force majeure, law, policy, government |
68
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
administration behavior and change in planned use of | |||||||
the land instead of CMPort Holdings and the enterprise | |||||||
subordinate to it); Or (2) Land use right of ownership | |||||||
certificate, the property ownership certificate failing to | |||||||
be handled (except for results incurred by force | |||||||
majeure, law, policy, government administration | |||||||
behavior and change in planned use of the land of | |||||||
CMPort Holdings and the enterprise subordinate to it); | |||||||
Or (3) In case of nonstandard other land use right and | |||||||
house property (except for results incurred by force | |||||||
majeure, law, policy, government administration | |||||||
behavior and change in planned use of the land instead | |||||||
of CMPort Holdings and the enterprise subordinate to | |||||||
it) and encountering actual losses (including but not | |||||||
limited to compensation, fine, expenditure and benefit | |||||||
lost), China Merchants Group will timely and fully | |||||||
compensate CMPort. | |||||||
Commitment letter about real estate leased by CMPort | |||||||
Holdings and the enterprise subordinate to it: In case of | |||||||
nonstandard situation of the leased property | |||||||
significantly influencing use of CMPort Holdings and | |||||||
the Company subordinate to it to engage in operation of | |||||||
normal business, China Merchants Group will actively | |||||||
take effective measures (including but not limited to | |||||||
arranging to provide the property with identical or | |||||||
similar conditions to be used for operation of related | |||||||
Company) to promote business operation of related | Effective | ||||||
Company to be conducted normally and alleviate or | |||||||
until no- | |||||||
eliminate adverse effect; In case of nonstandard of the | |||||||
Other | longer to be | Ongoi | |||||
CMG | leased property causing CMPort Holdings and the | 26 July 2018 | |||||
commitment | enterprise subordinate to it produce actual additional | the actual | ng | ||||
controller of | |||||||
expenditures or losses (such as third-party | |||||||
the Company | |||||||
compensation), China Merchants Group will actively | |||||||
coordinate and negotiate with other related party to | |||||||
support normal operation of CMPort Holdings and the | |||||||
enterprise subordinate to it to the great extent and avoid | |||||||
or control continuous enlargement of the damage; At | |||||||
the same time, China Merchants Group agrees | |||||||
compensate CMPort Holdings and the enterprise | |||||||
subordinate to it in cash for actual losses incurred to | |||||||
CMPort Holdings and the enterprise subordinate to it | |||||||
for this reason to relieve or eliminate adverse effect. | |||||||
Commitment letter about allotted land of the enterprise | |||||||
subordinate to China Merchants Port Holdings | |||||||
Company Limited from China Merchants Group: In | |||||||
case that the above allotted land is withdrawn or needs | |||||||
to be translated into assignment land due to policy | |||||||
adjustment in the future after the transaction is | |||||||
completed, China Merchants Group will actively | |||||||
coordinate with CMPort and related companies such as | Effective | ||||||
China Merchants Group International Port (Qingdao) | |||||||
until no- | |||||||
Co., Ltd. and Shantou CMPort Group Co., Ltd. to | |||||||
Other | longer to be | Ongoi | |||||
CMG | handle the transfer procedure or take other feasible | 26 July 2018 | |||||
commitment | countermeasures. In case of any actual loss (excluding | the actual | ng | ||||
controller of | |||||||
land-transferring fees or rent, fees paid for taking rural | |||||||
the Company | |||||||
land, ownership registration fees, taxes and dues and | |||||||
other related expenses to be paid by Chiwan Wharf or | |||||||
above-mentioned related companies according to | |||||||
provisions of laws and regulations) incurred to CMPort | |||||||
or above-mentioned related companies for this reason, | |||||||
China Merchants Group will timely and fully | |||||||
compensate actual loss incurred to CMPort or above- | |||||||
mentioned related companies. | |||||||
CMG | Other | Commitment letter about undertaking the accreditation | 14 | Effective | Ongoi | ||
commitment | fees of property ownership certificate for the perfection | September | until no- | ng | |||
69
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
of the land and house property of CMPort Holdings and | 2018 | longer to be | |||||
the enterprise subordinate to it: In case of defective | the actual | ||||||
land use right and house property involved by the | controller of | ||||||
Company subordinate to CMPort Holdings on account | the Company | ||||||
of operation (namely land use right and house property | |||||||
of the Company subordinate to CMPort Holdings | |||||||
without complete ownership certificate existing before | |||||||
the transaction is completed), incurring registration fees | |||||||
such as taxes and dues, compensation and fine in the | |||||||
process of perfecting legal procedures of defective land | |||||||
use right and house property by the subordinate to | |||||||
CMPort Holdings, China Merchants Group will timely | |||||||
and fully compensate to the Company subordinate to | |||||||
CMPort Holdings for undertaking. | |||||||
Commitment letter about related matters of CMPort | |||||||
after the transaction is completed: After the transaction | |||||||
is completed, Chiwan Wharf will become port business | |||||||
asset management headquarters and domestic capital | Three to five | ||||||
operation platform of China Merchants Group, deeply | |||||||
participate in integration of domestic regional port | years and | ||||||
assets and enlarge the scale of domestic listed assets to | CMG is the | ||||||
make net profit of CMPort Holdings (00144.HK) | 30 | actual | |||||
Other | enjoyed as per the rights and interests in the | controller of | Ongoi | ||||
CMG | September | ||||||
commitment | consolidated statement of listed Company in recent one | the Company | ng | ||||
fiscal year fail to exceed 50% net profit of consolidated | 2018 | ||||||
statement of the listed Company and net asset of | |||||||
CMPort Holdings (00144.HK) enjoyed in light of rights | |||||||
and interests in the consolidated statement of listed | |||||||
Company in recent one fiscal year fail to exceed 30% | |||||||
net asset in the consolidated statement of the listed | |||||||
Company within 3-5 years after the transaction is | |||||||
completed. | |||||||
China Merchants Group and all its directors, | |||||||
supervisors and administrative officers ensure the | |||||||
transaction report, its abstract, other information | |||||||
provided for the transaction and application document | |||||||
are true, accurate and complete without false record, | |||||||
misleading statement or important omission as well as | |||||||
take individual and joint legal liability for false record, | |||||||
misleading statement or important omission. If the | |||||||
information provided or disclosed by this transaction is | |||||||
suspected of false records, misleading statements or | |||||||
major omissions, and is investigated by the judicial | |||||||
authorities or investigated by the China Securities | |||||||
Regulatory Commission (CSRC), the directors, | |||||||
supervisors or senior managers of China Merchants | |||||||
Group do not transfer the shares that have interests in | |||||||
Other | listed Company, and submit the written application and | Effective | Ongoi | ||||
CMG | stock account of the suspension of the transfer to the | 26 July 2018 | |||||
commitment | Board of Directors of the CMPort within two trading | continuously | ng | ||||
days after receiving the filing inspection notice, and the | |||||||
Board of Directors shall apply for lock-up on behalf of | |||||||
the CMG Hong Kong to the Stock Exchange and | |||||||
Registration and Settlement Company. In case of | |||||||
failing to file a locking application within two | |||||||
transaction days and after the Board of Directors is | |||||||
authorized for verification, identity information and | |||||||
account information on directors, supervisors or | |||||||
administrative officers of China Merchants Group will | |||||||
be directly submitted to Stock Exchange and | |||||||
Registration and Settlement Company with locking | |||||||
applied; In case of Board of Directors failing to submit | |||||||
identity information and account information on | |||||||
directors, supervisors or administrative officers of | |||||||
China Merchants Group to Stock Exchange and | |||||||
Registration and Settlement Company, Stock Exchange |
70
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
and Registration and Settlement Company will be | |||||||
authorized to directly lock related shares. In case that | |||||||
the situation of violating laws and rules is found upon | |||||||
investigation conclusion, directors, supervisors or | |||||||
administrative officers of China Merchants Group | |||||||
promise locked shares are voluntarily used for | |||||||
compensating related investors. | |||||||
1. CMG Hong Kong ensures related information | |||||||
provided for the transaction is true, accurate and | |||||||
complete without false record, misleading statement or | |||||||
important omission; 2. CMG Hong Kong ensures the | |||||||
data provided to CMPort and all intermediary organs | |||||||
participating in the transaction is true, accurate and | |||||||
complete original written data or data copy. Data copy | |||||||
is consistent with original data and signature and seal | |||||||
of all the documents are true. The signatory of such | |||||||
documents is legally authorized and effectively signs | |||||||
such documents without any false record, misleading | |||||||
statement or important omission; 3. CMG Hong Kong | |||||||
ensures descriptions and confirmations issued for the | |||||||
transaction is true, accurate and complete without false | |||||||
record, misleading statement or important omission; 4. | |||||||
CMG Hong Kong ensures that statutory disclosure and | |||||||
report obligation has been performed, and no contracts, | |||||||
agreements, arrangements or miscellaneous that should | |||||||
have been disclosed exists; 5. The CMG Hong Kong | |||||||
made the commitment that if the information provided | |||||||
or disclosed by this transaction is suspected of false | |||||||
records, misleading statements or major omissions, and | |||||||
is investigated by the judicial authorities or investigated | |||||||
by the China Securities Regulatory Commission | |||||||
(CSRC), it does not transfer the shares that have | |||||||
interests in listed Company, and submit the written | |||||||
CMG | Other | application and stock account of the suspension of the | Effective | Ongoi | |||
Hong | transfer to the Board of Directors of the CMPort within | 26 July 2018 | |||||
commitment | continuously | ng | |||||
Kong | two trading days after receiving the filing inspection | ||||||
notice, and the Board of Directors shall apply for lock- | |||||||
up on behalf of the CMG Hong Kong to the Stock | |||||||
Exchange and Registration and Settlement Company. In | |||||||
case of failing to file a locking application within two | |||||||
transaction days and after the Board of Directors is | |||||||
authorized for verification, identity information and | |||||||
account information on CMG Hong Kong will be | |||||||
directly submitted to Stock Exchange and Registration | |||||||
and Settlement Company with locking applied; In case | |||||||
of Board of Directors failing to submit identity | |||||||
information and account information on CMG Hong | |||||||
Kong to Stock Exchange and Registration and | |||||||
Settlement Company, Stock Exchange and Registration | |||||||
and Settlement Company will be authorized to directly | |||||||
lock related shares. If the investigation finds that there | |||||||
is a violation of the law, CMG Hong Kong committed | |||||||
to lock the shares voluntarily for the relevant investor | |||||||
compensation; 6. If CMG Hong Kong promises to | |||||||
related document, data and information provided in the | |||||||
reorganization process aren't true, accurate or complete | |||||||
or are with false record, misleading statement or | |||||||
important omission, CMG Hong Kong is willing to | |||||||
legally bear corresponding legal responsibility; 7. In | |||||||
case of CMG Hong Kong violating the above promise, | |||||||
incurring losses to CMPort, CMG Hong Kong will take | |||||||
corresponding compensation responsibility. | |||||||
Other | 1. CMPID ensures related information provided for the | Effective | Ongoi | ||||
CMPID | transaction is true, accurate and complete without false | 26 July 2018 | |||||
commitment | record, misleading statement or important omission; 2. | continuously | ng | ||||
CMPID ensures the data provided to CMPort and all |
71
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
intermediary organs participating in the transaction is true, accurate and complete original written data or data copy. Data copy is consistent with original data and signature and seal of all the documents are true. The signatory of such documents is legally authorized and effectively signs such documents without any false record, misleading statement or important omission; 3. CMPID ensures description and confirmation provided for the transaction are true, accurate and complete without any false record, misleading statement or important omission; 4. CMPID ensures that statutory disclosure and report obligation has been performed, and no contracts, agreements, arrangements or miscellaneous that should have been disclosed exists; 5. The CMPID made the commitment that if the information provided or disclosed by this transaction is suspected of false records, misleading statements or major omissions, and is investigated by the judicial authorities or investigated by the China Securities Regulatory Commission (CSRC), it does not transfer the shares that have interests in CMPort, and submit the written application and stock account of the suspension of the transfer to the Board of Directors of the CMPort within two trading days after receiving the filing inspection notice, and the Board of Directors shall apply for lock-up on behalf of the CMG Hong Kong to the Stock Exchange and Registration and Settlement Company. If the application for lock-up is not submitted within two transaction days, the Board of Directors is authorized to verify and submit the identity information and account information of CMPID directly to the Stock Exchange and Registration and Settlement Company and apply for lock-up; If the Board of Directors fails to submit the identity information and account information of the CMPID to the Stock Exchange and Registration and Settlement Company, then the Stock Exchange and Registration and Settlement Company shall be authorized to directly lock the relevant shares. If the investigation finds that there is a violation of the law, CMPID committed to lock the shares voluntarily for the relevant investor compensation; 6. If CMPID promises to related document, data and information provided in the reorganization process aren't true, accurate or complete or are with false record, misleading statement or important omission, CMPID is willing to legally bear corresponding legal responsibility; 7. In case of CMPID violating the above commitment, incurring losses to CMPort, CMPID will take corresponding compensation responsibility.
1. CMPort Holdings ensures related information | |||||
provided for the transaction is true, accurate and | |||||
complete without false record, misleading statement or | |||||
important omission; 2. CMPort Holdings ensures the | |||||
data provided to CMPort and all intermediary organs | |||||
participating in the transaction is true, accurate and | |||||
CMPort | Other | complete original written data or data copy. Data copy | Effective | Ongoi | |
is consistent with original data and signature and seal | 26 July 2018 | ||||
Holdings | commitment | of all the documents are true. The signatory of such | continuously | ng | |
documents is legally authorized and effectively signs | |||||
such documents without any false record, misleading | |||||
statement or important omission; 3. CMPort Holdings | |||||
ensures description and confirmation provided for the | |||||
transaction are true, accurate and complete without any | |||||
false record, misleading statement or important | |||||
omission; 4. CMPort Holdings ensures that statutory |
72
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
disclosure and report obligation has been performed, | |||||||
and no contracts, agreements, arrangements or | |||||||
miscellaneous that should have been disclosed exists; 5. | |||||||
CMPort Holdings made the commitment that if the | |||||||
information provided or disclosed by this transaction is | |||||||
suspected of false records, misleading statements or | |||||||
major omissions, and is investigated by the judicial | |||||||
authorities or investigated by the China Securities | |||||||
Regulatory Commission (CSRC); CMPort Holdings | |||||||
committed that if CMPort Holdings violated the | |||||||
above promise, incurring losses to CMPort, CMPort | |||||||
Holdings will take corresponding compensation | |||||||
responsibility. | |||||||
1. China Merchants Group ensures related information | |||||||
provided for the transaction is true, accurate and | |||||||
complete without false record, misleading statement or | |||||||
important omission; 2. China Merchants Group ensures | |||||||
the data provided to CMPort and all intermediary | |||||||
organs participating in the transaction is true, accurate | |||||||
and complete original written data or data copy. Data | |||||||
copy is consistent with original data and signature and | |||||||
seal of all the documents are true. The signatory of such | |||||||
documents is legally authorized and effectively signs | |||||||
such documents without any false record, misleading | |||||||
statement or important omission; 3. China Merchants | |||||||
Group ensures descriptions and confirmations issued | |||||||
for the transaction is true, accurate and complete | |||||||
without false record, misleading statement or important | |||||||
omission; 4. China Merchants Group ensures that | |||||||
statutory disclosure and report obligation has been | |||||||
performed, and no contracts, agreements, arrangements | |||||||
or miscellaneous that should have been disclosed | |||||||
exists; 5. China Merchants Group made the | |||||||
commitment that if the information provided or | |||||||
disclosed by this transaction is suspected of false | |||||||
records, misleading statements or major omissions, and | |||||||
is investigated by the judicial authorities or investigated | |||||||
by the China Securities Regulatory Commission | |||||||
CMG | Other | (CSRC), it does not transfer the shares that have | 26 July 2018 | Effective | Ongoi | ||
interests in CMPort, and submit the written application | |||||||
commitment | continuously | ng | |||||
and stock account of the suspension of the transfer to | |||||||
the Board of Directors of the CMPort within two | |||||||
trading days after receiving the filing inspection notice, | |||||||
and the Board of Directors shall apply for lock-up on | |||||||
behalf of China Merchants Group to the Stock | |||||||
Exchange and Registration and Settlement Company. In | |||||||
case of failing to file a locking application within two | |||||||
transaction days and after the Board of Directors is | |||||||
authorized for verification, identity information and | |||||||
account information of China Merchants Group will be | |||||||
directly submitted to Stock Exchange and Registration | |||||||
and Settlement Company with locking applied; In case | |||||||
of Board of Directors failing to submit identity | |||||||
information and account information of China | |||||||
Merchants Group to Stock Exchange and Registration | |||||||
and Settlement Company, Stock Exchange and | |||||||
Registration and Settlement Company will be | |||||||
authorized to directly lock related shares. If the | |||||||
investigation finds that there is a violation of the law, | |||||||
China Merchants Group committed to lock the shares | |||||||
voluntarily for the relevant investor compensation; 6. If | |||||||
China Merchants Group promises to related document, | |||||||
data and information provided in the reorganization | |||||||
process aren't true, accurate or complete or are with | |||||||
false record, misleading statement or important | |||||||
omission, China Merchants Group is willing to legally |
73
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
bear corresponding legal responsibility; In case of | |||||||
China Merchants Group violating the above promise, | |||||||
incurring losses to CMPort, China Merchants Group | |||||||
will take corresponding compensation responsibility. | |||||||
Chiwan Wharf and all its directors, supervisors and | |||||||
administrative officers ensure the transaction report, its | |||||||
abstract, other information provided for the transaction | |||||||
and application document are true, accurate and | |||||||
complete without false record, misleading statement or | |||||||
important omission as well as take individual and joint | |||||||
legal liability for false record, misleading statement or | |||||||
important omission. If the information provided or | |||||||
disclosed by this transaction is suspected of false | |||||||
records, misleading statements or major omissions, and | |||||||
is investigated by the judicial authorities or investigated | |||||||
by the China Securities Regulatory Commission | |||||||
(CSRC), the directors, supervisors, or senior managers | |||||||
of Chiwan Wharf do not transfer the shares that have | |||||||
interests in CMPort, and submit the written application | |||||||
Chiwan | and stock account of the suspension of the transfer to | ||||||
Wharf | the Board of Directors of the CMPort within two | ||||||
and all | trading days after receiving the filing inspection notice, | ||||||
directors, | Other | and the Board of Directors shall apply for lock-up on | Effective | Ongoi | |||
superviso | behalf of them to the Stock Exchange and Registration | 26 July 2018 | |||||
rs and | commitment | and Settlement Company. In case of failing to file a | continuously | ng | |||
senior | locking application within two transaction days and | ||||||
managem | after the Board of Directors is authorized for | ||||||
ent | verification, identity information and account | ||||||
information on directors, supervisors or administrative | |||||||
officers of Chiwan Wharf will be directly submitted to | |||||||
Stock Exchange and Registration and Settlement | |||||||
Company with locking applied; In case of Board of | |||||||
Directors failing to submit identity information and | |||||||
account information on directors, supervisors or | |||||||
administrative officers of Chiwan Wharf to Stock | |||||||
Exchange and Registration and Settlement Company, | |||||||
Stock Exchange and Registration and Settlement | |||||||
Company will be authorized to directly lock related | |||||||
shares. In case that the situation of violating laws and | |||||||
rules is found upon investigation conclusion, directors, | |||||||
supervisors or administrative officers of Chiwan Wharf | |||||||
promise locked shares are voluntarily used for | |||||||
compensating related investors. | |||||||
CND Group will irrevocably and unconditionally | |||||||
agrees it will ensure transferee of such land use right | |||||||
China | and its successor and assignee will be fully exempted | 20 March | |||||
Nanshan | from responsibility for the above matters in case of | 2001; 18 | |||||
Develop | Other | CMPort encountering losses, needing to bear expenses | June 2003; | Effective | Ongoi | ||
ment | commitment | and liabilities, undergoing claim for compensation or | 29 | continuously | ng | ||
(Group) | needing to file a lawsuit due to any actual or potential | September | |||||
Inc. | illegal and unenforceable issues incurred by land use | 2004 | |||||
Other | agreement and relevant documents signed and to be | ||||||
signed by it. | |||||||
commitment | |||||||
In order to properly solve the issue regarding the | |||||||
s made to | |||||||
minority | ownership of the land of 270,692 square meters | ||||||
shareholders | transferred to CMPort by CND Group as a | ||||||
China | contribution, CND Group hereby irrevocably | ||||||
Nanshan | undertakes as follows: | ||||||
Develop | Other | 1. CND Group affirms the historical fact that it | 2 July 2020 | Effective | Ongoi | ||
ment | commitment | contributed to the restructuring and listing of Chiwan | continuously | ng | |||
(Group) | Wharf with the right to use 270,692 square meters of | ||||||
Inc. | land in 1993. Besides, it affirms that the 270,692 square | ||||||
meters of land has been transferred to CMPort | |||||||
(formerly known as Chiwan Wharf) and the right to use | |||||||
the land is owned by CMPort. 2. CND Group will |
74
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||
continue keeping the original undertaking and ensure | |||||||
that the signing of the relevant agreement will not | |||||||
damage CMPort's rights and interests of 148,119 square | |||||||
meters of land transferred in 1993 to CMPort (formerly, | |||||||
Chiwan Wharf) as a contribution. 3. CND Group will | |||||||
continue giving full play to its advantages to fully | |||||||
support land-related authorities in Shenzhen City to | |||||||
secure CMPort's right to use the 270,692 square meters | |||||||
of land. Moreover, CND Group will continue to | |||||||
actively assist CMPort in going through the | |||||||
corresponding procedures for the change of ownership | |||||||
of property rights and perfect legal procedures related | |||||||
to the right to use the land (e.g., defining the boundary | |||||||
line of land, land surveying, and claiming for the | |||||||
certificate of land). In addition, CND Group undertakes | |||||||
to cover all costs incurred accordingly (including the | |||||||
land premium). 4. All consequent losses to CMPort | |||||||
shall be borne by CND Group, should the latter break | |||||||
the above undertaking. Furthermore, CND Group will | |||||||
shoulder all liabilities for damage, if the asset integrity | |||||||
of the listed company, CMPort, is damaged. | |||||||
1. The company has agreed not to transfer the shares | |||||||
subscribed within twelve months from the end date of | |||||||
the issue (which refers to the listing date of the stock | |||||||
issued) by CMPort. It has requested the Board of | |||||||
CMPort to apply with the Shenzhen Branch of China | |||||||
Securities Depository and Clearing Co., Ltd. (CSDC) | |||||||
China- | Commitment | for locking the shares subscribed by the company to | |||||
make sure that the aforementioned shares held by the | |||||||
Africa | of shares | company will not be transferred within twelve months | |||||
Develop | lock-up and | 4 November | 3 November | Expir | |||
from the end date of the issue. 2. Except for the sell | |||||||
ment | share | 2019 | 2020 | ed | |||
permitted by regulatory authorities that does not | |||||||
Fund Co., | reduction | ||||||
constitute nonperformance or incomplete performance | |||||||
Ltd. | plan | ||||||
of the aforementioned commitment, the company | |||||||
undertakes that it will authorize CSDC to transfer the | |||||||
fund from the sell into its account to be owned by all its | |||||||
shareholders if it violates the aforementioned | |||||||
commitment. 3. The company declares that it will | |||||||
faithfully fulfill its commitment and bear corresponding | |||||||
legal liabilities. | |||||||
1. The company has agreed not to transfer the shares | |||||||
subscribed within twelve months from the end date of | |||||||
the issue (which refers to the listing date of the stock | |||||||
issued) by CMPort. It has requested the Board of | |||||||
CMPort to apply with the Shenzhen Branch of China | |||||||
Securities Depository and Clearing Co., Ltd. (CSDC) | |||||||
Shenzhen | for locking the shares subscribed by the company to | ||||||
Commitment | make sure that the aforementioned shares held by the | ||||||
Infrastruc | of shares | company will not be transferred within twelve months | |||||
ture | lock-up and | from the end date of the issue. 2. The company | 4 November | 3 November | Expir | ||
Investme | |||||||
nt Fund | share | committed that as not fulfilling nonperformance or | 2019 | 2020 | ed | ||
reduction | incomplete performance of the aforementioned | ||||||
Partnershi | |||||||
plan | commitment, the company shall compensate the direct | ||||||
p (LP) | economic loss of other shareholders. The company | ||||||
undertakes that if it violates the aforementioned | |||||||
commitment, it will authorize CSDC to transfer the | |||||||
fund from the sale into its account to be owned by all | |||||||
shareholders. 3. The company declares that it will | |||||||
faithfully fulfill its commitment and bear corresponding | |||||||
legal liabilities. | |||||||
Whether | |||||||
fulfilled on | Yes | ||||||
time | |||||||
Specific | N/A | ||||||
reasons for |
75
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
failing to fulfill commitment s on time and plans for
next step (if any)
2. Where there Had Been an Earnings Forecast for an Asset or Project and the Reporting Period Was still within the Forecast Period, Explain why the Forecast Has Been Reached for the Reporting Period.
- Applicable √ Not applicable
IV. Occupation of the Company's Capital by the Controlling Shareholder or Its Related Parties for Non-Operating Purposes
- Applicable √ Not applicable
During the Reporting Period, the controlling shareholder or its related parties did not occupy capital or repay for non-operating purposes. Deloitte Touche Tohmatsu Certified Public Accountants LLP issued the Special Report on Occupation of the Company's Capital by the Controlling Shareholder and Other Related Parties, and refer to www.cninfo.com.cnfor details.
V. Explanations Given by the Board of Directors, the Supervisory Board and the Independent Directors (if any) Regarding the Independent Auditor's "Modified Opinion" on the Financial Statements of the Reporting Period
□ Applicable √ Not applicable
VI. YoY Changes to Accounting Policies, Estimates and Methods
On 14 April 2020, the Company held the 7th Meeting of the 9th Board of Directors and the 7th Meeting of the 9th Supervisory Committee, where the Proposal on Changes in Accounting Estimation of the Depreciable Life of Some Fixed Assets was considered and approved. In accordance with the Accounting Standards for Business Enterprises No. 4 - Fixed Assets and the Company's related regulations, the Company reviewed the expected service life of its fixed assets based on their performance and use conditions, and decided to make adjustment to the depreciable life of some fixed assets to make it more reasonable, thus reflecting the Company's financial conditions and operating results in a more objective and fair manner. For the specific content, please
76
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
refer to the Announcement on Changes in Accounting Estimates of Depreciation Period of Partial Fixed Assets (Announcement No.: 2020-037) published on www.cninfo.com.cnon 16 April 2020.
On 19 June 2020, the Ministry of Finance issued Provisions on the Accounting Treatment of the COVID-19Pandemic-related Rental Concessions in Cai Kuai [2020] File No.10 (hereinafter referred to as "File No.10"). It's specified in File No. 10 that, for rental concessions, provided that certain conditions are satisfied, an enterprise can conduct accounting treatment according to Accounting Standards for Business Enterprises No. 21 - Leases, or adopt the simplified method specified in File No.10. Where the enterprise adopts the simplified method, it's unnecessary to assess whether there is lease changes or re-assess the lease classifications. The enterprise shall apply the option to all the similar lease contracts and shall not change it arbitrarily.
For further information, please refer to (III) Changes in Significant Accounting Policies and Accounting Estimates in Part XII Financial Statements for details.
VII. Retrospective Restatements due to Correction of Material Accounting Errors in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII. YoY Changes to the Scope of the Consolidated Financial Statements
On 19 November 2020, Cyber Chic, a subsidiary of the Company, and the other shareholders of CMICT (Ningbo Port and CITIC Port Investment Co., Ltd.) resolved by way of shareholders' resolutions to establish the Budget Committee, and entered into a Cooperation Agreement with Ningbo Port (the "Cooperation Agreement"). The Budget Committee comprised three directors. Each of the shareholders of CMICT nominated one director to be a member of the Budget Committee, and the director nominated by Cyber Chic was the chairman. The Budget Committee is primarily responsible for approving CMICT 's annual business plans, annual financial budgets and final accounts, and after-tax profit distribution plans. Any matters to be considered by the Budget Committee shall be approved by a two-thirds majority.
Pursuant to the Cooperation Agreement, Cyber Chic and Ningbo Port will consult and communicate
77
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
among themselves to reach consensus before exercising their shareholders' rights. If the parties to the Cooperation Agreement cannot reach consensus on any matter in relation to CMICT's operations and management, the matter shall be decided in accordance with the opinion of Cyber Chic. No consideration was payable by either party under the Cooperation Agreement. Upon the completion of the Cooperation Agreement, Cyber Chic and Ningbo Port together had an over-50% interest in CMICT. Accordingly, the Company has included CMICT into its consolidated financial statements since 19 November 2020, and CMICT has since become a subsidiary instead of a joint venture of the Company, with the Company's interest in CMICT remaining the same.
IX. Engagement and Disengagement of Independent Auditor
Current independent auditor
Name of the domestic independent auditor | Deloitte Touche Tohmatsu Certified Public | |
Accountants LLP | ||
The Company's payment to the domestic independent auditor | 639.53 | |
(RMB'0,000) | ||
How many consecutive years the domestic independent auditor | 9 | |
has provided audit service for the Company | ||
Names of the certified public accountants from the domestic | Li Weihua, Zhang Min | |
independent auditor writing signatures on the auditor's report | ||
How many consecutive years the certified public | accountants | 2 |
have provided audit service for the Company | ||
Name of the overseas independent auditor (if any) | Deloitte Touche Tohmatsu | |
The Company's payment to the overseas independent auditor | 362.26 | |
(RMB'0,000) (if any) | ||
How many consecutive years the overseas independent auditor | 9 | |
has provided audit service for the Company (if any) | ||
Names of the certified public accountants from the overseas | ||
independent auditor writing signatures on the auditor's report (if | Yu Jianmin | |
any) | ||
How many consecutive years the certified public | accountants | 1 |
have provided audit service for the Company (if any) | ||
Indicate by tick mark whether the independent auditor was changed for the Reporting Period. □ Yes √ No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls: Approved by the 7th Meeting of the 9th Board of Directors in 2020 and 2019 Annual General Meeting of the Company, the Company was allowed to continuously engage Deloitte Touche Tohmatsu Certified Public Accountants LLP as the 2020 independent auditor for the audit of annual financial statements and internal control in the 2020. The audit price for 2020 annual financial statements was RMB9.6379 million and the price for internal control was RMB0.38 million. The total expense on aforesaid two audit work was RMB10.0179 million.
78
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
X. Possibility of Delisting after Disclosure of this Report
□ Applicable √ Not applicable
XI. Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII. Major Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period. Other legal matters
Whether | Trial results and | Situation of | |||||
Lawsuit | execution of | Disclo | Disclo | ||||
Basic situation of | form into | Process of lawsuit | influences of | ||||
amount (RMB | judgment of | sure | sure | ||||
lawsuit (arbitration) | estimated | (arbitration) | lawsuit | ||||
'0,000) | lawsuit | date | index | ||||
liabilities | (arbitration) | ||||||
(arbitration) | |||||||
Summary of Brazil | 21,310.97 | Yes | In progress | Relatively low | - | - | - |
TCP Case (note) | risk | ||||||
Summary of other | |||||||
matters not meeting | Part was | ||||||
the disclosure | Relatively low | ||||||
6,043.20 | No | completed, and | - | - | - | ||
standards for major | risk | ||||||
part is in progress | |||||||
lawsuits | |||||||
(arbitrations) | |||||||
Note: This represents the significant contingent liabilities arising from the litigations between TCP and its subsidiaries and local tax authority, employee or former employee of TCP and its subsidiaries in Brazil at as the year end. According to the latest estimates of the Company's management, the possible compensation is RMB213,109,668.45 but it is not likely to cause outflow of economic benefits from the Company. Therefore, the contingent liabilities arising from the above pending litigations are not recognized as provisions. The counter- bonification where the Company as the beneficiary will be executed by the former TCP shareholder that disposed the shares. According to the counter-bonification agreement, the former TCP shareholder need to make counter- bonification to the Company in respect of the above contingent liabilities, with the compensation amount not exceeding pre-determined amount and specified period.
XIII. Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV. Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
79
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
XV. Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for Employees
The Company is implementing the stock option incentive plan, and the review and approval procedures carried out in connection with the Stock Option Incentive Plan are as follows:
- At the 2nd Meeting of the Nomination, Remuneration and Appraisal Committee of the 9th Board of Directors in 2019 held on 10 October 2019, the following proposals were considered and approved, including Stock Option Incentive Plan of CMPort (Draft) (hereinafter referred to as the "Stock Option Incentive Plan (Draft)") and its summary, Stock Option Incentive Plan of CMPort (Phase I) (Draft) (hereinafter referred to as the "Stock Option Incentive Plan (Phase I) (Draft)") and its summary, Management Measures for the Stock Option Incentive Plan of CMPort (hereinafter referred to as the "Management Measures for the Stock Option Incentive Plan"), Appraisal Measures for Implementing the Stock Option Incentive Plan and Implementation Appraisal Measures of Stock Option Incentive Plan by China Merchants Port Group Co., Ltd. (hereinafter referred to as "Implementation Appraisal Measures of Stock Option Incentive Plan").
- At the 9th Extraordinary Meeting of the 9th Board of Directors in 2019 held on 11 October 2019, the following proposals were reviewed and approved, including Stock Option Incentive Plan (Draft) and its summary, Stock Option Incentive Plan (Phase I) (Draft) and its summary, Management Measures for the Stock Option Incentive Plan, Implementation Appraisal Measures of Stock Option Incentive Plan, and Proposal on Requesting the General Meeting to Authorize the Board of Directors to Go Through Share Incentive Procedures, and independent directors expressed independent opinions. At the 2nd Extraordinary Meeting of the 9th Supervisory Committee in 2019 held on the same day, the following proposals were reviewed and approved, including Stock Option Incentive Plan (Draft) and its summary, Stock Option Incentive Plan (Phase I) (Draft) and its summary, Management Measures for the Stock Option Incentive Plan, and Implementation Appraisal Measures of Stock Option Incentive Plan, and the List of Incentive Objects under the Stock Option Incentive Plan (Phase I) was reviewed with opinions expressed. Refer to the relevant announcements (Announcement No. 2019-069, No. 2019-070) disclosed on www.cninfo.com.cn for details.
- On 3 January 2020, the Company received Approval on the Implementation of Stock Option Incentive Plan of CMPort (GZKF [2019] No. 748) issued by the State-owned Assets Supervision
80
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
and Administration Commission of the State Council from China Merchants Group, the actual controller of the Company. In principle, approval was given to the Company for its implementation of the Stock Option Incentive Plan and performance appraisal goals under the Plan. Refer to the relevant announcement (Announcement No. 2020-001) disclosed on www.cninfo.com.cn for details.
- At the 1st Extraordinary Meeting of the 9th Board of Directors in 2020 held on 9 January 2020, Stock Option Incentive Plan (Phase I) (Revised Draft) and its summary were reviewed and approved, and independent directors expressed independent opinions. At the 1st Extraordinary Meeting of the 9th Supervisory Committee in 2020 held on the same day, Stock Option Incentive Plan (Phase I) (Revised Draft) and its summary were reviewed and approved and List of Incentive objects under the Stock Option Incentive Plan (Phase I) (After Adjustment) was reviewed with opinions expressed. Refer to the relevant announcements (Announcement No. 2020-002, No. 2020- 003, No. 2020-004) disclosed on www.cninfo.com.cn for details.
- On 20 January 2020, the Company disclosed the Announcement on Notes of the Supervisory Committee on the Review and Publicity of the List of Incentive Objects under the Stock Option Incentive Plan (Phase I). The Supervisory Committee reviewed the list of incentive objects for the first grant. The Company published the names and positions of the incentive objects for the first grant of the stock option in its internal OA system from 10 January to 19 January 2020. By the end of the publicity, the Company's Supervisory Committee had not received any objection against the incentive objects for the first grant. Refer to the relevant announcement (Announcement No. 2020- 009) disclosed on www.cninfo.com.cn for details.
- At the 1st Extraordinary General Meeting of 2020 held on 3 February 2020, the following proposals were considered and approved, including Stock Option Incentive Plan (Draft) and its summary, Stock Option Incentive Plan (Phase I) (Revised Draft) and its summary, Management Measures for the Stock Option Incentive Plan, Implementation Appraisal Measures of Stock Option Incentive Plan, and Proposal on Requesting the General Meeting to Authorize the Board of Directors to Go Through Share Incentive Procedures. The Company's Stock Option Incentive Plan was approved and the Board of Directors was authorized to determine the grant date, grant stock option to the incentive objects when they meet the conditions and go through all procedures required for the grant. On the same day, the Company disclosed Self-inspection Report on the
81
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Trading of the Company's Shares by Insiders and Incentive Objects of the Stock Option Incentive Plan (Phase I) according to its verification of the trading engaged by the insiders and incentive objects. Refer to the relevant announcement (Announcement No. 2020-011) disclosed on www.cninfo.com.cn for details.
- At the 2nd Extraordinary Meeting of the 9th Board of Directors in 2020 and the 2nd Extraordinary Meeting of the 9th Supervisory Committee in 2020 held on 3 February 2020, the Proposal on the Grant of Stock Option (the First Grant) to Incentive Objects of the Stock Option Incentive Plan of the Company was considered and approved respectively. The Company's Board of Supervisors reviewed the list of incentive objects under the Stock Option Incentive Plan (Phase I) on the grant date and expressed opinions, and independent directors expressed independent opinions. Refer to the relevant announcements (Announcement No. 2020-012, No. 2020-013, No. 2020-014) disclosed on www.cninfo.com.cn for details.
- On 14 March 2020, the Company has completed registration for the grant of stock option (the first grant) under the Stock Option Incentive Plan (Phase I). Refer to the Announcement on Completion of the Grant of Stock Option (the First Grant) under the Stock Option Incentive Plan (Phase I) of the Company (Announcement No. 2020-020) disclosed on www.cninfo.com.cn for details.
- At the 1st Extraordinary Meeting of the 10th Board of Directors in 2021 and the 1st Extraordinary Meeting of the 10th Supervisory Committee in 2021 held on 29 January 2021, the Proposal on Adjusting the Exercise Price of the First Grant under the Stock Option Incentive Plan (Phase I) and the Proposal on the Grant of Stock Option (the Reserved) to Incentive Objects of the Stock Option Incentive Plan (Phase I) of the Company were considered and approved respectively. The Supervisory Committee reviewed the list of incentive objects for the reserved stock options under the Stock Option Incentive Plan (Phase I) on the grant date, and independent directors expressed independent opinions. Refer to the relevant announcements (Announcement No. 2021-007, No. 2021-008) disclosed on www.cninfo.com.cn for details.
- On 9 February 2021, the Company disclosed the Announcement on Notes of the Supervisory Committee on the Review and Publicity of the List of Incentive Objects for the Reservation under the Stock Option Incentive Plan (Phase I) (Announcement No. 2021-009). The Company published
82
China Merchants Port Group Co., Ltd. | Annual Report 2020 |
the names and positions of the incentive objects for reserved stock options in its internal OA system from 29 January 2021 to 8 February 2021. By the end of the publicity, the Company's Supervisory Committee had not received any objection against the incentive objects for reserved stock options. Refer to the relevant announcement (Announcement No. 2021-009) disclosed on www.cninfo.com.cn for details.
- 5 March 2021, the Company has completed registration for the grant of stock option (the reserved) under the Stock Option Incentive Plan (Phase I). Refer to the Announcement on Completion of the Grant of Stock Option (the Reserved) under the Stock Option Incentive Plan (Phase I) of the Company (Announcement No. 2021-013) disclosed on www.cninfo.com.cn for details.
XVI. Major Related-Party Transactions
1. Continuing Related-Party Transactions
As % | |||||||||||||
Relat | of the | ||||||||||||
total | Obtainabl | ||||||||||||
ionsh | Type | Approved | Over | ||||||||||
value | Way | e market | |||||||||||
ip | of | Specific | Pricing | Total value | transaction | the | Index to | ||||||
Related | Transacti | of all | of | price for | |||||||||
with | trans | transactio | principl | (RMB'0,00 | line | approve | Disclosure date | disclosed | |||||
party | the | actio | n | e | on price | 0) | the | (RMB'0,0 | d line or | settle | same-type | information | |
same- | ment | transactio | |||||||||||
Com | n | type | 00) | not | ns | ||||||||
pany | |||||||||||||
transact | |||||||||||||
ions | |||||||||||||
CHINA | |||||||||||||
COSCO | Affili | Lease, | www.cninfo | ||||||||||
SHIPPIN | Rend | Settle | .com.cn | ||||||||||
ated | labor | ||||||||||||
G | legal | er | service, | Market | 47,308.92 | 47,308.92 | 43.66% | 37,799.33 | Yes | d | 47,308.92 | 16 April 2020 | (Announce |
GROUP | perso | servi | testing | price | month | ment | |||||||
and its | n | ce | fee, etc. | ly | No.2020- | ||||||||
subsidiar | 031) | ||||||||||||
ies | |||||||||||||
Rend | |||||||||||||
er | |||||||||||||
China | Unde | servi | |||||||||||
Merchant | ce to | Labor | |||||||||||
s Shekou | r the | relate | www.cninfo | ||||||||||
contr | cost, | Settle | |||||||||||
Industrial | ol of | d | lease | .com.cn | |||||||||
Zone | party | Market | d | (Announce | |||||||||
Holdings | ultim | and | expense | price | 8,715.03 | 8,715.03 | 7.56% | 16,127.05 | No | month | 8,715.03 | 16 April 2020 | ment |
Co., Ltd. | ate | lease | of land | ly | No.2020- | ||||||||
share | and | ||||||||||||
and its | land | 031) | |||||||||||
subsidiar | holde | to | houses | ||||||||||
r | |||||||||||||
ies | relate | ||||||||||||
d | |||||||||||||
party | |||||||||||||
Rend | |||||||||||||
er | |||||||||||||
servi | Labor | ||||||||||||
Antong | Affili | ce to | cost, | Settle | www.cninfo | ||||||||
Holdings | ated | relate | freight | Market | .com.cn | ||||||||
Co., Ltd. | legal | d | forwardin | 12,779.54 | 12,779.54 | 12.90% | 9,154.30 | Yes | d | 12,779.54 | 16 April 2020 | (Announce | |
and its | party | g agent, | price | month | ment | ||||||||
subsidiar | perso | and | Port | ly | No.2020- | ||||||||
n | |||||||||||||
ies | recei | service | 031) | ||||||||||
ve | charge | ||||||||||||
servi | |||||||||||||
ce |
83
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||||||
Total | -- | -- | 68,803.49 | -- | 63,080.68 | -- | -- | -- | -- | -- | |||
Large-amount sales return in | None | ||||||||||||
detail | |||||||||||||
The Proposal on Recognition of 2019 Daily Related-party Transaction and the Forecast of 2020 Daily Related-party | |||||||||||||
Give the actual situation in the | Transaction was reviewed and approved on the 7th Meeting of the 9th | Board of Directors on 14 April 2020, which | |||||||||||
allowed | the Company and subsidiaries | to conduct | daily | business transactions with related-parties, transactions | |||||||||
Reporting Period (if any) where | |||||||||||||
including office leasing, software procurement and labor cost. The amount of daily related-party transactions in 2020 | |||||||||||||
an estimate had been made for | |||||||||||||
is estimated to be RMB975 million. The actual amount of the above related-parties daily transactions was RMB1.153 | |||||||||||||
the total value of continuing | |||||||||||||
billion. Due to the actual market demand and business development requirement, there were differences existed | |||||||||||||
related-party transactions by type | |||||||||||||
because of the normal management adjustment, without major influences to the daily operation and performance of | |||||||||||||
to occur in the Reporting Period | the Company. Refer to Announcement on Recognition of Daily Related-party Transactions in 2020 and the Forecast | ||||||||||||
of Daily Related-party Transactions in 2021 disclosed on www.cninfo.com.cndated 31 March 2021. | |||||||||||||
Reason for any significant | |||||||||||||
difference between the | N/A | ||||||||||||
transaction price and the market | |||||||||||||
reference price (if applicable) |
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
3. Related Transactions Regarding Joint Investments in Third Parties
Registered | Total assets | Net | |||||
Related | capital of | Net assets of | profit of | ||||
Co- | Name of | of investees | |||||
relation | Main business of investees | investees | investees | investees | |||
investor | investees | (RMB'0,00 | |||||
ship | (RMB'0,0 | (RMB'0,000) | (RMB'0, | ||||
0) | |||||||
00) | 000) | ||||||
Investment and assets | |||||||
management; land | |||||||
development services; park | |||||||
management service; | |||||||
Under | China | electricity, heat power and | |||||
the | Merchants | water supply; engineering | |||||
Liaoning | ultimate | Northeast | management service; property | ||||
control | Asia | management; plant leasing; | |||||
Port Group | 450,000 | 450,276.51 | 450,207.39 | 207.39 | |||
of same | Developm | meetings, exhibitions and | |||||
Co., Ltd. | |||||||
actual | ent | relevant services; | |||||
controll | Investmen | management consulting | |||||
er | t Co., Ltd. | services. (for project subject | |||||
to approval of laws, business | |||||||
activities are allowed to carry | |||||||
out with the approval of | |||||||
relevant departments | |||||||
Investment and assets | |||||||
management; land | |||||||
development services; park | |||||||
management service; | |||||||
China | Under | China | electricity, heat power and | ||||
the | Merchants | water supply; engineering | |||||
Merchants | |||||||
ultimate | Northeast | management service; property | |||||
Shekou | |||||||
control | Asia | management; plant leasing; | |||||
Industrial | 450,000 | 450,276.51 | 450,207.39 | 207.39 | |||
of same | Developm | meetings, exhibitions and | |||||
Zone | |||||||
actual | ent | relevant services; | |||||
Holdings | |||||||
controll | Investmen | management consulting | |||||
Co., Ltd. | |||||||
er | t Co., Ltd. | services. (for project subject | |||||
to approval of laws, business | |||||||
activities are allowed to carry | |||||||
out with the approval of | |||||||
relevant departments | |||||||
China | Under | China | Mainly engage in investments | ||||
Merchants | the | Merchants | in equity of listed and unlisted | 60,012 | - | - | - |
Venture | ultimate | Port | enterprises; the investment | ||||
Capital | control | (Shenzhen | direction of fund mainly |
84
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||
Manageme | of same | ) | involves in wharf-related | ||||||
nt Co., Ltd. | actual | Industrial | industries, technological | ||||||
controll | Innovatio | innovation, business model | |||||||
er | n Private | innovation and trade | |||||||
Equity | digitalization projects | ||||||||
Investmen | |||||||||
t Fund | |||||||||
Partnershi | |||||||||
p (Limited | |||||||||
Partnershi | |||||||||
p) | |||||||||
China | |||||||||
Merchants | |||||||||
Shenzhen | Port | ||||||||
(Shenzhen | Mainly engage in investments | ||||||||
China | Under | ||||||||
) | in equity of listed and unlisted | ||||||||
Merchants | the | ||||||||
Industrial | enterprises; the investment | ||||||||
Venture | ultimate | ||||||||
Innovatio | direction of fund mainly | ||||||||
Capital | control | ||||||||
n Private | involves in wharf-related | 60,012 | - | - | - | ||||
Fund | of same | ||||||||
Equity | industries, technological | ||||||||
Center | actual | ||||||||
Investmen | innovation, business model | ||||||||
(Limited | controll | ||||||||
t Fund | innovation and trade | ||||||||
Partnership | er | ||||||||
Partnershi | digitalization projects | ||||||||
) | |||||||||
p (Limited | |||||||||
Partnershi | |||||||||
p) |
4. Credits and Liabilities with Related Parties
Whether there are credits and liabilities with non-operating related parties
√Yes □ No
Credits receivable with related parties
Whether | Recovered in | Interest in | |||||||
there is | |||||||||
Beginning | Increased in | the | the | Ending | |||||
occupation | |||||||||
Related | Related | Forming | balance | the Reporting | Reporting | Interest | Reporting | balance | |
on non- | |||||||||
party | relationship | reason | (RMB'0,00 | Period | Period | rate | Period | (RMB'0,000 | |
operating | |||||||||
0) | (RMB'0,000) | (RMB'0,000 | (RMB'0,00 | ) | |||||
capital or | |||||||||
) | 0) | ||||||||
not | |||||||||
Other | |||||||||
China | company | ||||||||
Merchants | under the | Bank | |||||||
Group | control of the | No | 89,006.52 | 953,449.44 | 885,563.54 | 1.64% | 1,707.16 | 156,892.42 | |
deposits | |||||||||
Finance | same | ||||||||
Co., Ltd. | controlling | ||||||||
shareholder | |||||||||
The ultimate | |||||||||
China | controlling | Bank | |||||||
shareholder | deposits/ | ||||||||
Merchants | No | 298,084.80 | 2,619,690.22 | 2,642,778.01 | 2.03% | 2,507.79 | 274,997.01 | ||
has major | Structural | ||||||||
Bank | influence on | deposits | |||||||
it | |||||||||
Effects of credits with | |||||||||
related parties on the | The above credits receivables with related parties were mainly deposits in financial institutions that | ||||||||
Company's operating | |||||||||
have no major influence on the Company's operating results and financial conditions. | |||||||||
results and financial | |||||||||
conditions |
Liabilities payable with related parties
Related | Forming | Beginning | Increased in | Recovered in | Interest in | Ending | ||
Related party | balance | the Reporting | the Reporting | Interest rate | the Reporting | balance | ||
relationship | reason | |||||||
(RMB'0,000) | Period | Period | Period | (RMB'0,000) | ||||
85
China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||
(RMB'0,000) | (RMB'0,000) | (RMB'0,000) | |||||||
Other | |||||||||
China | company | ||||||||
under the | |||||||||
Merchants | |||||||||
control of the | Borrowing | 121,756.34 | 318,718.02 | 121,976.02 | 4.00% | 4,021.81 | 318,498.34 | ||
Group Finance | |||||||||
same | |||||||||
Co., Ltd. | controlling | ||||||||
shareholder | |||||||||
The ultimate | |||||||||
China | controlling | ||||||||
shareholder | |||||||||
Merchants | Borrowing | 9,009.30 | 1,894 | 0 | 3.41% | 282.09 | 10,903.32 | ||
has major | |||||||||
Bank | |||||||||
influence on | |||||||||
it | |||||||||
Effects of liabilities with | |||||||||
related parties on the | The above liabilities payables with related parties were mainly financial institution loans that have no | ||||||||
Company's operating results | major influence on the Company's operating results and financial conditions. | ||||||||
and financial conditions |
5. Other Major Related-Party Transactions
- The Company established Northeast Asia Investment through investments together with its related parties Liaoning Port Group and CMSK. The registered capital of Northeast Asia Investment is RMB4.5 billion, among which RMB1 billion is subscribed by the Company accounting for 22.22% of the registered capital.
- The Company and subsidiaries opened the accounts at China Merchants Bank. In 2020, the maximum outstanding of deposits at China Merchants Bank did not exceed RMB5 billion and the maximum loan balance did not exceed RMB10 billion.
- The Company intends to lend its self-raised funds to Jinyu Rongtai, China Merchants Port Development (Shenzhen) Co., Ltd., Zhangzhou Port, and Shunde New Port that are wholly- owned/majority-owned subsidiaries of CMPort Holdings, a majority-owned subsidiary of the Company, and provide financial assistance to CMPort (Zhoushan) RoRo Logistics Co., Ltd., another majority-owned subsidiary of the Company, to supplement working capital and replace loans. The Company disclosed the Announcement on Financial Assistance to Subsidiaries and Related-party Transactions on 30 April 2020. The above financial assistance was deliberated and passed at the 4th Extraordinary Meeting of the 9th Board of Directors in 2020 and 2019 Annual General Meeting of Shareholders. Thus far, the above financial assistance has not been implemented.
- The Company, its related party, China Merchants Venture, and China Merchants Venture Fund managed by China Merchants Venture plan to jointly invest and establish China Merchants Port
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
(Shenzhen) Industry Innovation Private Equity Investment Fund Partnership (Limited Partnership) (This is a tentative name. The ultimate name is subject to industrial and commercial registration.) The investment fund will invest in quality projects in wharf-related industries, the innovation of technologies and business models, and trade digitalization. China Merchants Venture will serve as the fund manager.
The AUM of the fund is RMB600.12 million, wherein China Merchants Venture, as the fund manager, general partner, and managing partner plans to contribute RMB120,000, while CMPort, as a limited partner, and China Merchants Venture Fund, as a limited partner, intend to contribute RMB300 million each. The fund plans to engage Shenzhen Chiwan Port Development Co., Ltd., a wholly-owned subsidiary of the Company, as its investment consultant.
- China Merchants Holdings (International) Information Technology Co., Ltd. (CMHIT), a majority-owned subsidiary of the Company, intends to attract investors, Jifa Logistics and Yingkou Port Group, through an increase in capital and share. Jifa Logistics, Dalian Port Container Development Co., Ltd. (DPCD), and Yingkou Port Group are majority-owned subsidiaries of the Company's related party, Liaoning Port Group. Particularly, Jifa Logistics, DPCD, and Yingkou Port Group will use 29.40%, 49.63% of their shares in DPN, and 100% of the equity in Yingkou Port Information Technology Co., Ltd. (YPIT) respectively to increase the capital of CMHIT. Upon completion of this capital increase, the registered capital of CMHIT will be changed to RMB87, 848,200. The equity ratios of the Company, CMPort Holdings, Jifa Logistics, DPCD, and Yingkou Port Group in CMHIT will become 13.18%, 43.74%, 13.26%, 22.38%, and 7.44%, respectively. The sum of the equity ratios of the Company and CMPort Holdings will reach 56.92%, while that of the rest shareholders will reach 43.08%. CMHIT will remain a majority-owned subsidiary of the Company. DPN and YPIT will become CMHIT's majority-owned subsidiary and wholly-owned subsidiary, respectively.
- CMHD, an indirect wholly-owned subsidiary of CMPort Holdings that is a majority-owned subsidiary of the Company, proposes to jointly invest to incorporate RSW in Djibouti, together with OHD, an indirect wholly-owned subsidiary of Dafeng International Co., Ltd. that is a wholly-owned subsidiary of the company's related party, CMSK, and DNC, a wholly-owned subsidiary of Great Horn Investment Holding S.A.S., a non-related party of the Company. The registered capital of
87
China Merchants Port Group Co., Ltd.Annual Report 2020
RSW in the first phase will be the amount in DJF equivalent to USD14,000. DNC, CMHD, and OHD will hold 60%, 23.5%, and 16.5% of the equity, respectively. In this phase, DNC, CMHD, and OHD will contribute USD8,400, USD3,290, and USD2,310 with their own funds. Upon registration and incorporation of RSW, DNC, CMHD, and OHD will raise the registered capital of RSW. They will start the second phase of contribution of USD120 million in total to RSW. Specifically, DNC, CMHD, and OHD will contribute USD72 million, USD28.2 million, and USD19.8 million, with their equity ratios will remain unchanged.
Information on the disclosure website for current announcements on significant related-party transactions:
Name of provisional reports | Disclosure date | Website |
Announcement on Establishing a Joint Venture | www.cninfo.com.cn(Announcement | |
and Related-party Transaction jointly with | 7 April 2020 | |
No. 2020-025) | ||
Related Parties through Investments | ||
Announcement on Deposit and Loan of Related- | www.cninfo.com.cn(Announcement | |
party Transaction in 2020 at China Merchants | 16 April 2020 | |
No. 2020-032) | ||
Bank | ||
Announcement on Financial Assistance and | 30 April 2020 | www.cninfo.com.cn(Announcement |
Related-party Transaction to the Subsidiary | No. 2020-045) | |
Announcement on Establishing a Investment | www.cninfo.com.cn(Announcement | |
Fund and Related-party Transaction jointly with | 1 December 2020 | |
No. 2020-085) | ||
Related Parties through Investments | ||
Announcement on Capital Increase in the | www.cninfo.com.cn(Announcement | |
Subsidiary and Related-party Transaction by the | 19 December 2020 | |
No. 2020-089) | ||
Related Parties | ||
Announcement on Establishing a Joint Venture | ||
and Related-party Transaction by the Majority- | 30 December 2020 | www.cninfo.com.cn(Announcement |
owned Subsidiary jointly with Related Parties | No. 2020-091) | |
through investments |
XVII. Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
Details of entrustment
On 13 December 2018, the Company held the 10th Extraordinary Meeting of the 9th Board of Directors, on which the Proposal on Signing Custody Agreement of Equity of Liaoning Port Group Co., Ltd. between the Company and China Merchants (Liaoning) Port Development Co., Ltd. was reviewed and approved. The Company was allowed to sign the Custody Agreement of Equity of Liaoning Port Group Co., Ltd. with China Merchants (Liaoning) Port Development Co, Ltd., the
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
indirect wholly-owned subsidiary of CMG, and made an appointment that China Merchants (Liaoning) Port Development entrusted all 49.9% shares of Liaoning Port Group Co., Ltd. held by it as of 13 December 2018 to the Company for management.
Project which generates profit or loss reaching over 10% of total profits of the Company during the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major guarantees
(1) Guarantees
Unit: RMB'0,000
Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure | Guarant | |||||||||||
date of the | Line of | Actual | Actual | Type of | Term of | Having | ee for a | |||||
Obligor | guarantee | occurrence | guarantee | expired | related | |||||||
line | guarantee | guarantee | guarantee | |||||||||
announce | date | amount | or not | party or | ||||||||
ment | not | |||||||||||
Terminal Link SAS | N/A | 7,100.40 | 11 June 2013 | 7,100.40 | General | About 20 | Not | Not | ||||
guarantee | years | |||||||||||
KHOR AMBADO | 30 March | 18,791.78 | 24 May 2019 | 11,312.58 | Joint- | About 13 | Not | Yes | ||||
FZCO | 2019 | liability | years | |||||||||
Total approved line for such | Total | actual | balance | of | ||||||||
such | guarantees at | the | ||||||||||
guarantees at the | end of the | 25,892.18 | 18,412.98 | |||||||||
Reporting Period (A3) | end | of the | Reporting | |||||||||
Period (A4) | ||||||||||||
Guarantee between the Company to its subsidiaries | ||||||||||||
Disclosure | Line of | Actual | Actual | Type of | Term of | Having | Guarant | |||||
Obligor | date of the | occurrence | guarantee | expired | ee for a | |||||||
guarantee | guarantee | guarantee | ||||||||||
guarantee | date | amount | or not | related | ||||||||
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||||||||||
line | party or | ||||||||||||||||
announce | not | ||||||||||||||||
ment | |||||||||||||||||
Chiwan | Wharf | 16 April | Joint- | About 1 | |||||||||||||
Holdings | (Hong | 400,000.00 | 28 July 2020 | 150,000.00 | Not | Not | |||||||||||
Kong) Limited | 2020 | liability | year | ||||||||||||||
Zhanjiang | Port | 16 April | 200,000.00 | - | - | - | - | - | - | ||||||||
(Group) Co., Ltd. | 2020 | ||||||||||||||||
Total approved line for such | Total | actual | amount | of | |||||||||||||
guarantees | in | the | Reporting | 600,000 | such | guarantees in | the | 150,000 | |||||||||
Period (B1) | Reporting Period (B2) | ||||||||||||||||
Total approved line for such | Total | actual | balance | of | |||||||||||||
such | guarantees at | the | |||||||||||||||
guarantees | at | the end of the | 600,000 | 150,000 | |||||||||||||
Reporting Period (B3) | end | of the | Reporting | ||||||||||||||
Period (B4) | |||||||||||||||||
Guarantees provided between subsidiaries | |||||||||||||||||
Disclosure | Guarante | ||||||||||||||||
date of the | |||||||||||||||||
Actual | Actual | Having | e for a | ||||||||||||||
guarantee | Line of | Type of | Term of | ||||||||||||||
Obligor | occurrence | guarantee | expired | related | |||||||||||||
line | guarantee | guarantee | guarantee | ||||||||||||||
date | amount | or not | party or | ||||||||||||||
announce | |||||||||||||||||
not | |||||||||||||||||
ment | |||||||||||||||||
China | Merchants | ||||||||||||||||
International | 16 April | 59,010.00 | - | - | - | - | - | - | |||||||||
Terminal | (Qingdao) | 2020 | |||||||||||||||
Co., Ltd. | |||||||||||||||||
Shenzhen | Jinyu | ||||||||||||||||
Rongtai | Investment | N/A | 80,000.00 | 12 January | 72,000.00 | Joint- | About 10 | Not | Not | ||||||||
Development | Co., | 2017 | liability | years | |||||||||||||
Ltd. | |||||||||||||||||
China | Merchants | ||||||||||||||||
International | N/A | 2,500.00 | 30 June 2016 | 2,500.00 | Joint- | About 10 | Not | Not | |||||||||
(China) | Investment | liability | years | ||||||||||||||
Co., Ltd. | |||||||||||||||||
China | Merchants | 4 May | General | About 10 | |||||||||||||
Finance | Company | 2012 | 326,246.24 | 4 May 2012 | 326,246.24 | guarantee | years | Not | Not | ||||||||
Limited | |||||||||||||||||
China | Merchants | 3 August | 3 August | General | About 10 | ||||||||||||
Finance | Company | 2015 | 326,246.24 | 2015 | 326,246.24 | guarantee | years | Not | Not | ||||||||
Limited |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||||
CMHI | Finance | 6 August | 587,243.23 | 6 August | 587,243.23 | General | About 5 | Not | Not | ||
(BVI) Co., Ltd | 2018 | 2018 | guarantee | years | |||||||
CMHI | Finance | 6 August | 391,495.49 | 6 August | 391,495.49 | General | About 10 | Not | Not | ||
(BVI) Co., Ltd | 2018 | 2018 | guarantee | years | |||||||
CMHI | Finance | 26 Septe | 9 October 2 | General | About 3 | Not | Not | ||||
mber 202 | 555,000.00 | 391,495.49 | guarantee | years | |||||||
(BVI) Co., Ltd | 020 | General | About 5 | Not | Not | ||||||
0 | |||||||||||
130,498.50 | guarantee | years | |||||||||
COLOMBO | |||||||||||
INTERNATIONAL | 16 September | General | About 13 | ||||||||
CONTAINER | N/A | 228,307.12 | 6,577.87 | Not | Not | ||||||
TERMINALS | 2012 | guarantee | years | ||||||||
LIMITED | |||||||||||
COLOMBO | |||||||||||
INTERNATIONAL | 16 September | General | |||||||||
CONTAINER | N/A | 9,787.39 | 9,787.39 | Infinite | Not | Not | |||||
2012 | guarantee | ||||||||||
TERMINALS | |||||||||||
LIMITED | |||||||||||
COLOMBO | |||||||||||
INTERNATIONAL | 16 September | General | |||||||||
CONTAINER | N/A | 16,312.31 | 16,312.31 | Infinite | Not | Not | |||||
TERMINALS | 2012 | guarantee | |||||||||
LIMITED | |||||||||||
Lome | Container | N/A | 8,024.99 | June 2015 | 1,376.29 | General | About 9 | Not | Not | ||
Terminal Co., Ltd. | guarantee | years | |||||||||
Lome | Container | N/A | 8,024.99 | June 2015 | 1,376.29 | General | About 9 | Not | Not | ||
Terminal Co., Ltd. | guarantee | years | |||||||||
Lome | Container | N/A | 8,024.99 | June 2015 | 1,376.29 | General | About 9 | Not | Not | ||
Terminal Co., Ltd. | guarantee | years | |||||||||
China | Merchants | ||||||||||
Port Development | N/A | 320,000.00 | 31 July 2017 | 58,000.00 | Joint- | About 5 | Not | Not | |||
(Shenzhen) | Co., | liability | years | ||||||||
Ltd. | |||||||||||
TCP - TERMINAL | |||||||||||
DE | General | About 6 | |||||||||
CONTElNERES | N/A | 37,653.00 | 19 April 2018 | 23,329.80 | Not | Not | |||||
DE PARANAGUA | guarantee | years | |||||||||
S/A. | |||||||||||
TCP - TERMINAL | |||||||||||
DE | 7 November | General | About 6 | ||||||||
CONTElNERES | N/A | 53,724.18 | 53,724.18 | Not | Not | ||||||
2016 | guarantee | years | |||||||||
DE PARANAGUA | |||||||||||
S/A. | |||||||||||
Shenzhen | Haixing | 30 March | 327,000.00 | 26 June 2019 | 16,150.08 | Joint- | About 18 | Not | Not | ||
Harbor | 2019 | liability | years |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||||||||||||
Development | Co., | ||||||||||||||||||
Ltd. | |||||||||||||||||||
Zhanjiang | Port | 16 April | 80,000.00 | - | - | - | - | - | - | ||||||||||
(Group) Co., Ltd. | 2020 | ||||||||||||||||||
Hambantota | 30 Dece | ||||||||||||||||||
International | Port | mber 202 | 231,559.00 | - | - | - | - | - | - | ||||||||||
Group (Pvt) Ltd. | 0 | ||||||||||||||||||
CHINA | 30 | ||||||||||||||||||
MERCHANTS | |||||||||||||||||||
December | 18,441.00 | - | - | - | - | - | - | ||||||||||||
HOLDINGS | |||||||||||||||||||
2020 | |||||||||||||||||||
(DJIBOUTI) FZE | |||||||||||||||||||
TCP - TERMINAL | |||||||||||||||||||
DE | 26 Septe | ||||||||||||||||||
CONTElNERES | mber 202 | 35,000.00 | - | - | - | - | - | - | |||||||||||
DE PARANAGUA | 0 | ||||||||||||||||||
S/A. | |||||||||||||||||||
Kong | Rise | 16 April | 110,000.00 | - | - | - | - | - | - | ||||||||||
Development | 2020 | ||||||||||||||||||
Limited | |||||||||||||||||||
Total approved line for such | Total | actual | amount | of | |||||||||||||||
guarantees | in | the | Reporting | 1,089,010.00 | such | guarantees in | the | 521,993.98 | |||||||||||
Period (C1) | Reporting Period (C2) | ||||||||||||||||||
Total approved line for such | Total | actual | balance | of | |||||||||||||||
such | guarantees at | the | |||||||||||||||||
guarantees | at | the end | of the | 3,819,600.17 | 2,415,735.67 | ||||||||||||||
Reporting Period (C3) | end | of the | Reporting | ||||||||||||||||
Period (C4) | |||||||||||||||||||
Total guarantee amount (total of the three kinds of guarantees above) | |||||||||||||||||||
Total | guarantee line approved | Total | actual | guarantee | |||||||||||||||
in | the | Reporting | Period | 1,689,010.00 | amount in the Reporting | 671,993.98 | |||||||||||||
(A1+B1+C1) | Period (A2+B2+C2) | ||||||||||||||||||
Total approved guarantee line at | Total | actual | guarantee | ||||||||||||||||
balance at the end of the | |||||||||||||||||||
the end of the Reporting Period | 4,445,492.35 | 2,584,148.65 | |||||||||||||||||
Reporting | Period | ||||||||||||||||||
(A3+B3+C3) | (A4+B4+C4) | ||||||||||||||||||
Total actual guarantee amount (A4+B4+C4) as % of the | 69.62% | ||||||||||||||||||
Company's net assets | |||||||||||||||||||
Of which: | |||||||||||||||||||
Balance of | guarantees | provided for shareholders, actual | 11,312.58 | ||||||||||||||||
controller and their related parties (D) | |||||||||||||||||||
Balance of debt guarantees provided directly or indirectly | 2,452,091.74 |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
for obligors with an over 70% debt/asset ratio (E)
Amount by which the total guarantee amount exceeds 50% of the Company's net assets (F)
Total of the three amounts above (D+E+F)
Joint responsibilities possibly borne in the Reporting Period None for undue guarantees (if any)
Provision of external guarantees in breach of the prescribed None procedures (if any)
Particulars of guarantees adopting complex methods □ Applicable √ Not applicable
(2) Irregularities in Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Entrusted Loans
728,258.34
3,191,662.65
Overview of entrusted loans in the Reporting Period
Unit: RMB'0,000 | ||||
Amount | Capital resources | Undue balance | Overdue amount | |
3,430 | Self-owned funds | 3,430 | 0 |
Particulars of entrusted loans with single significant amount or low security, bad liquidity, and no capital preservation
□ Applicable √ Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment for entrusted loans
□ Applicable √ Not applicable
4. Continuing Major Contracts
-
Applicable √ Not applicable
5. Other Major Contracts - Applicable √ Not applicable
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
No such cases in the Reporting Period.
XVIII. Corporate Social Responsibilities
1. Fulfillment of Social Responsibilities
Always upholding the principle of sustainable development and performing its social responsibilities proactively, the Company promotes its sustainable development with efforts in continuously strengthening environment governance, safeguarding the rights and interests of its employees, attaching importance to occupational health, participating in charitable activities, and responding to targeted poverty alleviation.
The Company is always committed to take on historical missions and has a strong sense of social responsibilities. During our journey of growth and development, we never steer away from the original goal. We take the lead to address social problems, continue to seek for the matching point for mutual development with the society and explore appropriate models for conducting charitable business that meets the needs of the current generation. By leveraging our core strengths to launch professional charitable activities, support regional development and preserve fine cultures, we will incorporate social development needs into our daily operation activities and join hands with even more partners to create a harmonious society and promote social progress. Refer to Corporate Social Responsibility Report of China Merchants Port Group Co., Ltd. in 2020 for the fulfillment of social responsibilities in the Reporting Period for details.
2. Measures Taken for Targeted Poverty Alleviation
(1) Plan of Targeted Poverty Alleviation
In 2020, the Company exerted multiple efforts for poverty alleviation. First, it vigorously implemented the national strategy of "eradicating poverty in China". Second, it adhered to the general ideas and requirements of China Merchants Group (CMG) for poverty alleviation. Third, it actively participated in education- and industry-based poverty alleviation and infrastructure construction. Fourth, the Company earnestly tackled difficulties in poverty alleviation. Fifth, a long- acting mechanism for poverty alleviation was formulated. Lastly, the annual plan for poverty alleviation was implemented. Looking ahead, the Company will respond to the call of the central government, continue driving rural revitalization, and consolidate the results of poverty alleviation.
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
Such combination of poverty alleviation results and rural revitalization will be effectively boost rural revitalization.
(2) Overview of Annual Targeted Poverty Alleviation
During the epidemic in 2020, the Company spent RMB3.76 million on purchasing agricultural products from poverty-stricken areas through the agriculture-promoting brand, "27° Nong", including taros from Qichun County, Hubei, mineral water from Yecheng County, Xinjiang, and Wuding and Yongde Counties, Yunnan. Meanwhile, the Company adopted several measures, such as poverty alleviation based on industry, employment, education, health, and consumption as well as helping and supporting projects, to push targeted poverty alleviation forward. It not only "gave fish to the poor", but also "taught them how to fish". It assisted designated poverty-stricken villages in getting rid of poverty.
(3) Results of Targeted Poverty Alleviation
Since the initiation of targeted poverty alleviation, the Company has enthusiastically responded to the China Merchants Group by supporting four designated poverty-stricken counties, namely, Weining County, Guizhou, Qichun County, Hubei, and Yecheng and Shache Counties, Xinjiang. (In 2020, the latter three counties were included in the list of counties requiring strict supervision and united efforts in fighting poverty.) In the meantime, the Company actively guided its subordinate enterprises to perform targeted poverty alleviation. For instance, Zhanjiang Port has helped "Mingli Village" shake off poverty: All 121 people in 43 poverty-stricken households met the "Eight Criteria" of Poverty Elimination (source of income, house, basic medical security, compulsory education, roads, drinking water, electricity, and TV) for being lifted out of poverty. Annual per capita income surged from less than RMB3,500 to over RMB13,000. The poverty elimination rate was 100%.
The specific inputs and results of the Company regarding the poverty alleviation in 2020 are as follows:
Index | Unit of | Amount/implementation |
measurement | ||
I. Overall situation | - | - |
Of which: 1. Fund | RMB'0,000 | 506 |
2. Materials converted to cash | RMB'0,000 | - |
II. Subitem investment | - | - |
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | |||
1. Industrial development poverty alleviation | - | - | ||
Of which: | 1.1 Type of plan of industrial | - | Agriculture and forestry industrial poverty | |
development poverty alleviation | alleviation | |||
1.2 Number of plan of industrial | Unit | 2 | ||
development poverty alleviation | ||||
1.3 Number of persons out of poverty | Person | 121 | ||
which were helped to set up file card | ||||
2. Transfer employment poverty alleviation | - | - | ||
training | 2.1 Number of persons of vocational | Person | - | |
3. Relocation poverty alleviation | - | - | ||
4. Educational poverty alleviation | - | - | ||
Of which: 4.1 Investment amount for poor | RMB'0,000 | 46 | ||
students supported | ||||
supported | 4.2 Number of poor students | Person | 23 | |
5. Healthcare poverty alleviation | - | - | ||
6. Ecological protection poverty alleviation | - | - | ||
7. Basic living standard guarantee | - | - | ||
Of which: | 7.1 Investment amount for three kinds | RMB'0,000 | - | |
of left-behind person | ||||
7.2 Assistant number of three kinds of | Person | - | ||
left-behind person | ||||
8. Social poverty alleviation | - | - | ||
8.1 Investment amount of targeted | RMB'0,000 | - | ||
poverty alleviation | ||||
9. Other plans | - | - | ||
Of which: 9.1 Investment amount | RMB'0,000 | 460 | ||
Purchasing agricultural products, poverty | ||||
9.2 Notes | alleviation of the poorest, infrastructure | |||
construction, etc. | ||||
In 2020, the poverty alleviation task force | ||||
stationed in Mingli Village made up of | ||||
Zhanjiang Port and Zhanjiang Municipal | ||||
Development and Reform Bureau received | ||||
III. Awards received (content, level) | - | the commendation from Zhanjiang Leading | ||
Group for Poverty Alleviation and | ||||
Development and was awarded the title of | ||||
"2019 Zhanjiang Municipal Advanced Unit | ||||
for Poverty Alleviation Work". |
3. Issues Related to Environmental Protection
Whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protection authorities?
No.
The Company strictly conformed to laws and regulations related to environmental protection, revised and perfected management policies for environmental protection, organized training on environmental protection, and assessed environmental risks. What's more, it intensified on-site management and control, reinforced routine inspection over environmental protection, and
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China Merchants Port Group Co., Ltd. | Annual Report 2020 |
strengthened environmental protection assessment to further improve environmental protection management.
The philosophy of green development is deeply rooted in the Company. The emission of all pollutants is strictly controlled by law. Pollutant disposal is compliant. Energy-saving technologies, such as the "smart transformation of the bucket-wheel stacker reclaimer", the "smart bulk cargo continuous conveyor system", and "shore-based power supply to ships", have been developed and applied to constantly enhance energy efficiency. Green and low-carbon ports are created to boost global climate governance. Furthermore, biodiversity protection practices such as the monitoring, investigation, and compensation of the marine ecology were carried out. The Company created green ports of harmonious co-existence with nature. It also cooperated with multiple parties in the green field to improve sustainable development. For the Company's efforts of environmental protection during the Reporting Period, please see the Corporate Social Responsibility Report of CMPort for 2020.
XIX Other Significant Events
Information Disclosure Index
In the Reporting Period, the Company disclosed the following significant events on Securities Times, Shanghai Securities News, Ta Kung Pao (HK), and www.cninfo.com.cn:
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China Merchants Port Group Co., Ltd. | Annual Report 2020 | ||||||||||||
Announce | Date | Title | |||||||||||
ment No. | |||||||||||||
Announcement on Approval of Stock Option Incentive Plan by State- | |||||||||||||
2020-001 | 3 January 2020 | owned Assets Supervision and Administration Commission of the State | |||||||||||
Council | |||||||||||||
2020-002 | 10 | January 2020 | Announcement on Resolutions of the 1st Special Meeting of the 9th Board | ||||||||||
of Directors in 2020 | |||||||||||||
2020-003 | 10 | January 2020 | Announcement on Resolutions | of | the | 1st | Special | Meeting | of | the | 9th | ||
Supervisory Committee in 2020 | |||||||||||||
Announcement on Notes and Revision of Stock Option Incentive Plan of | |||||||||||||
2020-004 | 10 | January 2020 | China Merchants Port Group Co., Ltd. (Phase I) (Revised Draft) and its | ||||||||||
Abstract | |||||||||||||
2020-005 | 10 | January 2020 | Reminder of Convening the 1st Extraordinary General Meeting of 2020 | ||||||||||
2020-006 | 10 | January 2020 | Report of the Public Call for | Proxy | Voting Rights of Independent | ||||||||
Directors | |||||||||||||
2020-007 | 16 | January 2020 | Announcement on Voluntary Information Disclosure of Business Volume | ||||||||||
Data of December 2019 | |||||||||||||
2020-008 | 20 | January 2020 | Announcement on an Estimated Growth in 2019 Annual Results | ||||||||||
Announcement on Notes of the Supervisory Committee on the Review | |||||||||||||
2020-009 | 20 | January 2020 | and Publicity of the List of Incentive Objects under the Stock Option | ||||||||||
Incentive Plan (Phase I) | |||||||||||||
2020-010 | 22 | January 2020 | Announcement on the Change of the Company's Registered Information | ||||||||||
with the Industrial and Commercial Administration | |||||||||||||
2020-011 | 4 February 2020 | Announcement on Resolutions of the 1st Extraordinary General Meeting | |||||||||||
of 2020 | |||||||||||||
2020-012 | 4 February 2020 | Announcement on Resolutions | of | the | 2nd | Special | Meeting | of | the | 9th | |||
Board of Directors in 2020 | |||||||||||||
2020-013 | 4 February 2020 | Announcement on Resolutions | of | the | 2nd | Special | Meeting | of | the | 9th | |||
Supervisory Committee in 2020 | |||||||||||||
2020-014 | 4 February 2020 | Announcement on the Grant of | Stock Option (the First | Grant) | to | ||||||||
Incentive Objects of the Stock Option Incentive Plan of the Company | |||||||||||||
Self-inspection Report on the Trading of the Company's Shares by | |||||||||||||
2020-015 | 4 February 2020 | Insiders and Incentive Objects of the Stock Option Incentive Plan (Phase | |||||||||||
I) | |||||||||||||
2020-016 | 4 February 2020 | Announcement on Resignation | of | Chairman of the Board and | |||||||||
Election of New Chairman of the Board | |||||||||||||
2020-017 | 14 | February 2020 | Announcement on Voluntary Information Disclosure of Business Volume | ||||||||||
Data of January 2020 | |||||||||||||
2020-018 | 21 | February 2020 | Reminder of the Issuance of 2020 Phase I Super-short-term Financing | ||||||||||
Bonds | |||||||||||||
2020-019 | 27 | February 2020 | Announcement on Issued Result | of | 2020 Phase | I Super-short-term | |||||||
Financing Bonds | |||||||||||||
2020-020 | 14 | March 2020 | Announcement on Completion of the Grant of Stock Option (the First |
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China Merchants Port Holdings Co. Ltd. published this content on 30 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 March 2021 15:07:09 UTC.
