Great Wall Motor : 2020Annual Report

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

H Share Stock Code: 2333

A Share Stock Code: 601633

* For identification purpose only

IMPORTANT NOTICE

• I. The Board, the Supervisory Committee and the directors, supervisors and senior management of the Company warrant that the contents of this annual report are true, accurate and complete and do not contain any false representations, misleading statements or material omissions, and jointly and severally take legal liability for its contents.

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

• III. Deloitte Touche Tohmatsu Certified Public Accountants LLP has issued the standard audited report for the Company without qualified opinion.

  The financial information in the annual report was prepared in accordance with China Accounting Standards for Business Enterprises and the relevant laws and regulations.

• IV. Wei Jian Jun, person-in-charge of the Company, Li Hong Shuan, person-in-charge of the accounting affairs and Lu Cai Juan, person-in-charge of the accounting department (head of the accounting department), declare that they warrant the truthfulness, accuracy and completeness of the financial report in this annual report.

• V. Proposal of profit distribution or capitalization of capital reserve during the Reporting Period reviewed by the Board

  As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the net profit of the Group and net profit attributable to shareholders of the Company in 2020 amounted to RMB5,362,490,194.32 and RMB5,362,490,194.32 respectively. The Company has implemented the profit plan for the first three quarters of 2020, pursuant to which it distributed a cash dividend of RMB0.28 (tax inclusive) per share to all shareholders, with a total cash dividend of RMB2,569,266,924.00 (tax inclusive) distributed. The cash dividends distributed in 2020 accounted for 47.91% of the Company's net profit attributable to shareholders of the Company for 2020.

  Having comprehensively considered the Company's profit distribution for the first three quarters of 2020, and the Company's actual operating conditions, in order to achieve sustainable development for the Company, deliver better performance to give back to shareholders, and better safeguard the long-term interests of the Company and all shareholders, the Company did not plan to distribute profit for the final period of 2020, and will not carry out capitalisation issue. The undistributed profit will be used for investment in the Company's existing projects with its own funds and to meet the funding needs of new projects in the future. This proposal is subject to the approval at the 2020 annual general meeting of the Company.

• VI. Risks relating to forward-looking statements

  √ Applicable

   Not applicableForward-looking statements, such as future plans and development strategies, contained in this report do not constitute any actual commitment of the Company to its investors. Investors should be aware of the investment risks.

• VII. Was there any non-operational appropriation of the Company's funds by controlling shareholders and its related parties?

  No

• VIII. Was there any provision of guarantee for external parties in violation of the stipulated decision-making procedures?

  No

• IX. Was there over half of the directors unable to guarantee the truthfulness, accuracy, and completeness of the annual report disclosed by the Company?

  No

• X. Reminder of material risks

  During the Reporting Period, there were no material risks resulting in any significant impact on the production and operation of the Company. Risks that the Company may encounter in the course of production and operation and its corresponding measures have detailed in "Discussion and Analysis concerning the Future Development of the Company" under item III of Section 5 headed "Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)" of this report.

• XI. Others

   Applicable √ Not applicable

CONTENTS

Section 1

Definitions 16

Section 8

Significant Events 89

Section 2

Corporate Profile and

Key Financial Indicators 18

Section 9

Changes in Ordinary Shares

and Shareholders 139

Section 3

Business Highlights of the Company 27

Section 4

Chairman's Statement 31

Section 5

Discussion and Analysis of the Business Operation of the Company

(Management Discussion and Analysis) 34

Section 6

Report of the Board 76

Section 7

Report of the Supervisory Committee 84

Section 10

Description of Preference Shares 150

Section 11

Directors, Supervisors,

Senior Management and Employees 151

Section 12

Corporate Governance 166

Section 13

Description of Corporate Bonds 192

Section 14

Financial Report (Auditor's Report) 193

Section 15

Index of Documents Available

for Inspection 388

Section 1

DEFINITIONS

Definitions

In this report, the following expressions shall, unless the context otherwise requires, have the following meanings:

Definitions for commonly used terms

"A Share(s)"	domestic share(s) with a nominal value of RMB1.00 each in the
share capital of the Company which are listed on the Shanghai Stock
Exchange and traded in Renminbi (Stock Code: 601633);
"A Shareholder(s)"	holder(s) of A Share(s);
"Articles"	articles of association of the Company, as amended, modified or
otherwise supplemented from time to time;
"Board"	the board of directors of the Company;
"Company" or	Great Wall Motor Company Limited (ڗ۬ӛԓٰ΅Ϟࠢʮ̡), a joint
"Great Wall Motor"	stock company incorporated in the PRC with limited liability, the H
Shares and A Shares of which are listed on the Hong Kong Stock
Exchange and the Shanghai Stock Exchange, respectively;
"Company Law"	Company Law of the PRC;
"Competing Business"	a business that is identical with or similar to the principal business
and other businesses of Great Wall Motor Company Limited;
"CSRC"	China Securities Regulatory Commission;
"Group"	Great Wall Motor Company Limited and its subsidiaries;
"H Share(s)"	the overseas-listed foreign share(s) with a nominal value of RMB1.00
each in the share capital of the Company which are listed on the
Main Board of the Hong Kong Stock Exchange and traded in Hong
Kong dollars (Stock Code: 2333);
"H Shareholder(s)"	holder(s) of H Share(s);
"Hong Kong Listing Rules"	the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited as amended from time to time;
"Hong Kong Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Model Code"	Model Code for Securities Transactions by Directors of Listed Issuers
as set out in Appendix 10 to the Hong Kong Listing Rules;

Section 1

De nitions

"PRC"	the People's Republic of China;
"Reporting Period" or	twelve months ended 31 December 2020;
"Current Period" or
"the Year"
"SFO"	Securities and Futures Ordinance (Chapter 571 of the Laws of Hong
Kong) as amended from time to time; and
"Shanghai Stock Exchange"	Shanghai Stock Exchange.

Section 2 Corporate Profile and Key Financial Indicators

CORPORATE INFORMATION
Chinese name of the Company	ڗ۬ӛԓٰ΅Ϟࠢʮ̡
Abbreviation of Chinese name of the Company	ڗ۬ӛԓ
English name of the Company	Great Wall Motor Company Limited
Abbreviation of English name of the Company	Great Wall Motor
Legal representative of the Company	Wei Jian Jun

II. CONTACT PERSONS AND CONTACT METHODS

Secretary to the Board

Representative of Securities Affairs

Name	Xu Hui (Company Secretary)	Chen Yong Jun
Address	No. 2266 Chaoyang Road South,	No. 2266 Chaoyang Road South,
Baoding, Hebei Province, the PRC	Baoding, Hebei Province, the PRC
Telephone	86(312)-2197813	86(312)-2197813
Fax	86(312)-2197812	86(312)-2197812
E-mail address	[e-mail]	[e-mail]

• III. BASIC INFORMATION

  Registered address of the Company

  Postal code of the registered address of the Company Office address of the Company

  Postal code of the office address of the Company

  Company's website

  E-mail address

  Principal place of business in Hong Kong

  No. 2266 Chaoyang Road South, Baoding,

  Hebei Province, the PRC 071000

  No. 2266 Chaoyang Road South, Baoding,

  Hebei Province, the PRC [e-mail]

  Room 1903-1904, 19/F, Hong Kong Trade Centre,

  161 Des Voeux Road Central, Sheung Wan,

  Hong Kong

• IV. INFORMATION DISCLOSURE AND PLACE OF DOCUMENT INSPECTION

Designated media for information disclosure Website designated by the CSRC for publishing this annual report

Place for inspection of the Company's annual reportsWebsite designated by the Hong Kong Stock Exchange for publishing this annual report

China Securities Journal, Shanghai Securities Newswww.sse.com.cn

Securities Legal Affairs Department of

Great Wall Motor Company Limited

No. 2266 Chaoyang Road South, Baoding, Hebei Province, the PRCwww.hkexnews.hk

The Company's website for publishing this annual reportwww.gwm.com.cn

Section 2

Corporate Pro le and Key Financial Indicators

V.

INFORMATION ON THE COMPANY'S SHARES

Information on the Company's Shares

Stock exchanges for the listing of StockStock classesthe Company's Shares abbreviation Stock codePrevious stock abbreviation

A Shares

H Shares

Stock classes

Shanghai Stock Exchange Great Wall Motor 601633

Hong Kong Stock Exchange Great Wall Motor 2333

Stock exchangesfor the listing of the Company's Shares Listing dateNumber of issued shares

- -

Board lot

A SharesShanghai Stock Exchange 28 September 2011 6,076,413,300

A Shares (Total shares: 9,175,953,300 shares, H Shares: 3,099,540,000 shares)H SharesHong Kong Stock Exchange 15 December 2003

3,099,540,000

H Shares (Total shares: 9,175,953,300 shares, A Shares: 6,076,413,300 shares)

100 shares

500 shares

Section 2

Corporate Pro le and Key Financial Indicators

VI. OTHER RELEVANT INFORMATION

Domestic accounting firm appointed by the Company

Name	Deloitte Touche Tohmatsu Certified
Public Accountants LLP
Office address	30/F, 222 Yan An Road East,
Huangpu District, Shanghai
Names of the	Tong Chuan Jiang
signing accountants	Yang Ning

Legal adviser to the Company

(as to Hong Kong law)Legal adviser to the Company

(as to the PRC law)

H Share registrar and transfer office in

Hong Kong

Herbert Smith Freehills (ceased to serve as the legal adviser to the Company as to Hong Kong law from 1 January 2021)

Fangda Partners (served as the legal adviser to the Company as to Hong Kong law from 1 January 2021)

Jincheng Tongda & Neal Law Firm, BeijingComputershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong

A Share registrar and transfer officeInvestor and media relations consultant

(H Shares)

Principal bankersAuthorised representativesShanghai Branch of China Securities Depository and Clearing Corporation Limited

14/F, East Tower, China Settlement Building,

No. 188 South Yanggao Road, Pudong New Area, ShanghaiCorporate Link Limited 5/F, Chung Nam Building,

1 Lockhart Road, Wanchai, Hong KongBank of China Limited, Baoding Yuhua sub-branch The Industrial and Commercial Bank of China,

Baoding Yonghua sub-branch

China Construction Bank Corporation,

Baoding Hengxiang South Street sub-branch China Everbright Bank Corporation Limited,

Shijiazhuang branch

China CITIC Bank Corporation Limited, Baoding branch Bank of Communications Co., Ltd., Baoding branch Ping An Bank Co., Ltd., Guangzhou branch

Ms. Wang Feng Ying Mr. Xu Hui

Financial year-end date

31 December

Section 2

Corporate Pro le and Key Financial Indicators

Executive DirectorsNon-Executive Director

Mr. Wei Jian Jun (Chairman)

Ms. Wang Feng Ying (Vice Chairman) Ms. Yang Zhi Juan

Mr. He Ping

Independent Non-Executive DirectorsEmployee Representative SupervisorMr. Li Wan Jun Mr. Ng Chi Kit

Mr. Ma Li Hui (resigned on 12 June 2020) Ms. Yue Ying (appointed on 12 June 2020)Mr. Chen Biao

Independent Supervisors

Ms. Zong Yi Xiang Ms. Liu QianAudit CommitteeRemuneration CommitteeNomination CommitteeStrategy CommitteeMr. He Ping Mr. Li Wan Jun Mr. Ng Chi Kit

Mr. Ma Li Hui (resigned on 12 June 2020) Ms. Yue Ying (appointed on 12 June 2020)Mr. Wei Jian Jun Mr. Li Wan Jun

Mr. Ma Li Hui (resigned on 12 June 2020) Ms. Yue Ying (appointed on 12 June 2020)Mr. Wei Jian Jun Mr. Ng Chi Kit

Mr. Ma Li Hui (resigned on 12 June 2020) Ms. Yue Ying (appointed on 12 June 2020)Mr. Wei Jian Jun Ms. Wang Feng Ying Mr. He Ping

Mr. Li Wan Jun

Mr. Ma Li Hui (resigned on 12 June 2020) Ms. Yue Ying (appointed on 12 June 2020)

Section 2

Corporate Pro le and Key Financial Indicators

VII. KEY ACCOUNTING INFORMATION AND FINANCIAL INDICATORS IN THE LAST FIVE

YEARS

(I)

Key accounting information
Increase/decrease
for the Current
Period over the
corresponding
2019	period last year	2018	2017	2016
Key accounting information	(%)
9,621,068.88	7.38	9,922,998.72	10,116,948.88	9,861,570.24
9,510,807.86	8.62	9,779,985.92	10,049,161.82	9,844,366.51
449,687.49	19.25	520,731.40	502,729.80	1,055,115.89
398,675.10	-3.77	388,877.21	429,819.69	1,035,362.67
1,397,230.24	-62.92	1,969,782.59	-107,667.01	883,540.62
9,140,898.60	8.13	9,299,224.22	9,546,032.71	8,595,641.79
7,968,448.73	7.34	8,148,094.26	8,196,690.36	7,436,022.35
316,860.30	0.73	362,738.04	390,568.81	383,280.64
389,666.99	5.30	457,519.86	440,639.78	317,542.44
195,545.34	30.54	167,630.37	159,846.54	139,446.05
271,622.04	12.93	174,337.91	336,457.33	318,023.64
-35,102.91	-49,387.52	13,860.11	-385.86
-50,361.76	-13,652.92	-31,707.87	-41,315.30
-4,934.87	-18,187.91	-	-
-7,330.20	-14,035.13	17,539.60	-
1,550.51	6,068.21	21,927.02	12,422.48	3,034.78
30,370.69	200.27	-	-	-
54,269.70	63.38	17,580.53	16,625.66	-
4,320.70	-121.29	5,797.65	-380.81	-1,577.44
477,684.36	20.41	623,203.73	585,415.24	1,226,070.49
34,212.43	44.35	25,287.99	39,068.85	24,757.52
1,841.15	-1.19	784.53	1,187.50	2,521.93
7,107.44	-48.92	7,627.54	2,278.37	1,712.74
510,055.64	22.09	647,707.20	623,296.60	1,248,306.08
56,982.35	51.77	122,943.29	118,957.95	192,910.61
453,073.29	18.36	524,763.91	504,338.65	1,055,395.46
3,385.80	-100.00	4,032.52	1,608.85	279.58

Total operating revenue 10,330,760.72

Operating revenue 10,330,760.72 Net profit attributable to shareholders of the

Company 536,249.02

Net profit attributable to shareholders of the Company after

extraordinary gains/losses 383,631.94

Net cash flow from

operating activities 518,123.29

Total operating costs 9,884,334.31

Operating costs 8,553,096.38

Tax and surcharges 319,187.61

Selling expenses 410,338.68

Administrative expenses 255,267.46 Research and development

expenses 306,747.96

Financial expenses 39,696.22 Impairment losses on assets

(losses stated with"-") -67,639.68

Impairment losses on credit

(losses stated with"-") -3,528.69

Gains or losses from changes in fair value

(losses stated with"-") 16,520.86

Investment gains 95,638.51 Share of investment gains of

associates and joint ventures 91,194.63

Other income 88,663.24 Gains from disposal of assets

(losses stated with"-")

-919.92

Operating profit 575,160.73

Non-operating income 49,387.18

Non-operating expenses 1,819.17 Losses from disposal of

non-current assets 3,630.78

Total profit 622,728.74

Income tax expenses 86,479.72

Net profit 536,249.02 Profit or loss attributable

to minority interests

Unit: 0'000cCurrency: RMB

0

Section 2 Corporate Pro le and Key Financial Indicators

Unit: 0'000cCurrency: RMB

Increase/decrease for the Current

Period over the end of thecorresponding period last yearThe end of 2018

The end of 2017

The end of 2016

(%)Net assets attributable to shareholders of the Company Total assets

5.41 5,252,483.11 4,913,453.04 4,729,480.17

36.18 11,180,041.13 11,054,707.38 9,230,916.06

Total liabilities

64.69 5,911,182.38 6,128,911.21 4,495,551.60

Total share capital as at the end of the Period

912,726.90

(II) Key financial indicators

Basic earnings per share (RMB/share)

Diluted earnings per share (RMB/share)

Basic earnings per share after extraordinary gains/losses (RMB/share)

Weighted average return on net assets (%)

Weighted average return on net assets after extraordinary gains/losses (%)

Description of key accounting information and financial indicators of the Company in the last five years as at the end of the Reporting Period

√ Applicable

 Not applicableNet profit attributable to the shareholders of the Company recorded a year-on-year increase during the Reporting Period was mainly due to the increase in the sale of automobiles and gross profit. Despite the serious impact of COVID-19 in the first half of the year, the transformation of Great Wall Motor into a global technology-driven mobility company accelerated as it continued to refine its organization structure and corporate culture. Meanwhile, the Company insisted on "end-user orientation". The new platform and brand-new models launched in 2020 were widely popular in the market, gaining momentum in technology R&D, brand marketing etc., which promoted both the sales volume and performance of Great Wall Motor.

Section 2 Corporate Pro le and Key Financial Indicators

• VIII. DIFFERENCE IN ACCOUNTING INFORMATION UNDER CHINA ACCOUNTING STANDARDS AND OVERSEAS ACCOUNTING STANDARDS

  (I) Differences between the net profit and net assets attributable to shareholders of the

  Company in the financial report disclosed in accordance with the International Accounting Standards and the China Accounting Standards

   Applicablec√ Not applicable

  • (II) Differences between the net profit and net assets attributable to shareholders of the Company in the financial report disclosed in accordance with the overseas accounting standards and the China Accounting Standards

     Applicablec√ Not applicable

  • (III) Differences between overseas and domestic accounting standards:

     Applicablec√ Not applicable

• IX. QUARTERLY KEY FINANCIAL INFORMATION IN 2020

Unit: RMBcCurrency: RMB

Third Quarter	Fourth Quarter
(January to	Second Quarter	(July to	(October to
March)	(April to June)	September)	December)
Total operating revenue	12,416,141,251.87	23,513,052,395.98	26,214,265,815.68	41,164,147,746.17
Operating revenue	12,381,783,622.23	23,547,410,025.62	26,214,265,815.68	41,164,147,746.17
Net profit attributable to shareholders
of the Company	-650,144,083.77	1,796,286,806.67	1,441,071,262.11	2,775,276,209.31
Net profit attributable to shareholders of the
Company after extraordinary gains/losses	-748,808,688.96	1,551,260,952.86	1,074,857,876.87	1,959,009,260.53
Net cash flow from operating activities	524,578,239.05	8,991,965,926.54	-9,776,209,847.77	5,440,898,608.02

First Quarter

Differences between quarterly data and information disclosed in regular reports  Applicablec√ Not applicable

Section 2

Corporate Pro le and Key Financial Indicators

X.

ITEMS AND AMOUNT OF EXTRAORDINARY GAINS/LOSSES

√ Applicable

 Not applicable

Extraordinary gains/losses

Unit: RMBcCurrency: RMB

2020

2019

2018

Profit or loss from disposal of non-current assets

Government grants accounted for in profit and loss account of the current period, except for government grants closely related to the Company's normal operations that were granted on an ongoing basis at a fixed standard amount or quantity in accordance with the State's policies and regulations Net profit or loss of the current period from the beginning of the period to the combination date for subsidiaries acquired through business combination under common control Non-operating gains and losses other than the above items

Investment gains from disposal of subsidiaries, other equity instrument investments, and disposal of wealth management products (losses stated with "-")

Gains from changes in fair value (losses stated with "-") Interest income on performance bond

Effect of minority interests

Effect of income tax

Total

• -9,199,220.02 43,207,041.88 57,976,477.13

• 1,266,977,636.02 609,187,841.95 322,488,351.22

54,486.41

-

• 85,699,829.09 90,769,597.30 98,351,583.15

• -89,308,089.77 219,270,174.59

• -73,302,005.19 -140,351,300.70

- -2,959.70 -70,482,054.37 510,123,858.51

1,025,378,584.90 -717,579.32 -263,854,453.41

1,318,541,837.56

Section 2

Corporate Pro le and Key Financial Indicators

XI. ITEMS MEASURED AT FAIR VALUE

√ Applicable

 Not applicable

Unit: RMBcCurrency: RMB

Effect on

Balance at	Balance at	Changes in	profit for
the beginning	the end of	the Current	the Current
Name of item	of the Period	the Period	Period	Period
76,585,824.00	244,394,136.00	167,808,312.00	167,808,312.00
4,286,106,393.12	4,581,799,760.30	295,693,367.18	1,923,778.14
380,777.69	2,271,973.16	1,891,195.47	2,237,168.55
0.00	24,500,000.00	24,500,000.00	-1,500,000.00
31,445,748,809.31	52,984,556,339.76	21,538,807,530.45
7,700,000.00	7,700,000.00	-
4,879,853.91	4,879,853.91	-5,260,631.60
35,816,521,804.12	57,850,102,063.13	22,033,580,259.01	165,208,627.09

Financial liabilities at fair value through profit or loss

Financial assets classified as at fair value through profit or loss

Including: Equity instrument investments

Debt instrument investment - wealth management products

Derivative financial assets

Other non-current financial assets Financial assets at fair value through other comprehensive income Including: Financing with receivables - notes receivable Other equity instrument investments

Including: Derivative financial liabilitiesTotal

XII. OTHERS

 Applicablec√ Not applicable

Section 3 Business Highlights of the Company

I. PRINCIPAL BUSINESS, OPERATING MODEL AND INDUSTRY DEVELOPMENT OF THE COMPANY DURING THE REPORTING PERIOD

• 1. Principal Business of the Company

  Great Wall Motor is one of the largest SUVs and pickup manufacturers in the PRC. It currently owns four brands, namely Haval, WEY, Great Wall Pick-up, and ORA. The Company, in cooperation with BMW, has established and put into operation a joint venture named Spotlight Automotive Limited which is engaged in providing three product categories-SUVs, sedans and pick-up trucks, as well as manufacturing and supply of related main auto parts.

• 2. Operating Model

  The Company promotes "user-centric" self-reform and innovates in categories and technologies to create a leading edge in niche markets.

  The Company is committed to establishing a global network integrating R&D, production, supply and sales.

  In respect of R&D, the Company always insists on "making targeted investments and pursuing industry leadership, with a view to accelerating its transformation into a "global technology-driven mobility company". The Group has built up a global R&D network spanning "10 places in seven countries" which revolves around the headquarters in Baoding and covers Germany, the United States, Japan, India, Austria and South Korea.

  With an integration of global high-quality resources, the Company has spent five years and more than RMB20 billion to develop three technology brands "LEMON", "TANK" and "COFFEE Intelligence", forming a technology ecosystem integrating "automatic driving, smart cockpit, efficient fuel and new energy". The LEMON Hybrid DHT technology released by the Company is a world-leading high-efficient, high-performance hybrid solution that breaks the monopoly of Sino-foreign joint venture companies and points to a new direction for the development of China's hybrid technology. Furthermore, the Company maintains industry-leading technology strength in the fields of traditional fuel powertrain, automatic transmission, hydrogen fuel cells, and unmanned driving.

  In respect of procurement of parts and components, the Company strives to build a highly integrated and adaptable industry-wide supply chain system. The GW4N20 engine independently developed by Honeycomb Yichuang Technology Co., Ltd., a subsidiary of the Company, received the title of "Top Ten Engines of 'China's Heart'"; 9HDCT is the world's first horizontal P29-speed wet dual-clutch transmission with remarkable fuel saving effect. In addition, the Company's plant in Tula formally signed a special purpose investment contract (SPIC) in Russia with the Ministry of Industry and Trade of the Russian Federation, and launched the Russian engine plant project to continuously deepen the localization of industry chain. Moreover, the Company has established in-depth cooperation with world-class suppliers such as Bosch, Continental, Valeo and Harman to build a world-class supply chain system.

Section 3 Business Highlights of the Company

In respect of production, the Company has built "12+5" production facilities across the world, including 12 full-process vehicle production bases and 5 KD plants. In China, its production bases in Baoding, Xushui, Tianjin, Yongchuan of Chongqing and Taizhou of Jiangsu have been completed and put into operation; its production base projects in Zhangjiagang of Jiangsu, Rizhao of Shandong and Pinghu of Zhejiang are progressing smoothly; and its project in Jingmen, Hubei has been formally signed. Overseas, the plant in Tula, Russia is operating smoothly; General Motors has delivered its Thai factory to the Company; and the Indian project is also advancing steadily.

In respect of marketing, the Company vigorously employed innovative marketing methods and expanded overseas markets. As to innovative marketing, Great Wall Motor made full use of the Internet, marketing network and service system to develop a full range of online and offline channels and carry out marketing activities such as zero-contact program, cloud group purchase and live broadcast, which achieved great results.

In addition, Great Wall Motor built strong connections with users and allowed them to name its products, and thus created a number of popular models, including Haval Big Dog, Tan Ke 300 and ORA series. Meanwhile, Great Wall Motor built a more intimate relationship with users through cooperation with big IPs and cross-sector fanfare. The Company leveraged its five largest regional marketing centers in Russia, Australia, South Africa, South America and the Middle East to establish presence in more than 60 countries and regions. Outside the PRC, the Company has built a network of over 500 sales outlets. The Haval brand ranked first in the automotive industry among the BrandZ Top 50 Globalised Chinese Brands in 2020.

In addition, based on the life cycle of automobiles, the Company extended the automobile industry chain by venturing into the sales, installation and after-sales service of charging piles for new energy vehicles.

3. Industry Overview

• (1) Slight year-on-year decline in automobile production and sales, a performance better than expected

  In 2020, the sudden COVID-19 outbreak dealt a heavy blow to the automobile industry. Despite the difficulties, the industry resolutely implemented the policies of the CPC Central Committee and the State Council and accelerated the transformation of marketing methods to boost automobile consumption. The annual production and sales volume of automobiles in the PRC decreased year-on-year by 2% and 1.9% to 25,225,000 units and 25,311,000 units, respectively.

• (2) Higher-than-industry decline in passenger vehicles with the production and sales volume of SUVs exceeding those of sedans for the first time

  In 2020, the production and sales volume of passenger vehicles amounted to 19,994,000 units and 20,178,000 units, a year-on-year decrease of 6.5% and 6%, narrowed by 2.7 and 3.6 percentage points from the previous year, respectively. Specifically, the production and sales volume of sedans decreased year-on-year by 10% and 9.9%, respectively; the production and sales volume of SUVs increased year-on-year by 0.1% and 0.7% to 9,398,000 units and 9,461,000 units respectively, which exceeded those of sedans for the first time.

Section 3 Business Highlights of the Company

• (3) Positive year-on-year growth in the production and sales volume of new energy vehicles

  In 2020, the production and sales volume of new energy vehicles reached 1,366,000 units and 1,367,000 units, up 7.5% and 10.9% year-on-year, respectively. New energy vehicles accounted for 5.4% of the total production and sales volume of automobiles. Among them, the production and sales volume of battery electric vehicles increased year-on-year by 5.4% and 11.6% to 1,105,000 units and 1,115,000 units, respectively; the production and sales volume of plug-in hybrid electric vehicles increased year-on-year by 18.5% and 8.4% to 260,000 units and 251,000 units, respectively.

• (4) Slight decline in automobile exports

  In 2020, automobile enterprises exported 995,000 vehicles, a year-on-year decrease of 2.9%. Among them, exports of passenger vehicles amounted to 760,000 units, up 4.8% year-on-year; exports of commercial vehicles amounted to 235,000 units, down 21.4% year-on-year. The exports of new energy vehicles reached approximately 70,000 units, up 89.4% year-on-year and accounting for 7.0% of the total automobile exports.

Note: The above industry data is sourced from China Association of Automobile Manufacturers.

• II. SIGNIFICANT CHANGES OF THE MAJOR ASSETS OF THE COMPANY DURING THE REPORTING PERIOD

   Applicablec√ Not applicable

• III. ANALYSIS OF THE CORE COMPETITIVENESS DURING THE REPORTING PERIOD

√ Applicable

 Not applicable

• 1. A culture characterized by justice and equality

  The Company aims to "boost synergy with integrity and pursue development with synergy", and to maintain its sustainable and healthy development by creating a fair, just, simple and transparent work environment. It has unveiled a new corporate culture: Enjoy Life Ecologically and Smartly; Make Changes with Integrity and Creditability for Sharing; Make a Little Progress Every Day", to further create a more dynamic and innovative work atmosphere.

• 2. A user-centred approach

  Driven by the "user-centred" core concept, the Company continued to revamp various aspects such as organizational mechanism, corporate culture and marketing innovation, such that the efficiency and quality of corporate operations were raised quickly. New habits, new spending patterns and new trends have made the Company's new concepts, new ideas and new categories come true. The Company always pursues ultimate user experience, striving to transform from a conventional automaker brand to a lifestyle brand.

Section 3 Business Highlights of the Company

• 3. Focusing on brand building to have kept advantages over category consolidated

  Over the years, the Company has been upholding the development strategy of focusing on the principal business while sharing quality resources. It has created unique competitive strengths by concentrating on specific sub-sectors. Having a thorough understanding of the market and consumer needs, the Company made a breakthrough with the launch of new categories, such as Haval Da Gou, ORA Hao Mao and Tan Ke 300, which were popular car models for cyber celebrities. These new products became top performers just after their launch.

• 4. Strengthening quality culture and focusing on quality improvement

  Upholding the quality culture of "constant refinement", the Company continuously improves its quality management to "drive performance growth and sustainable development with high-quality products".

• 5. Well-established global supply chain system

  The Company has long been committed to independent R&D and production of core parts and components, which greatly enhances the competitiveness of its automobiles in terms of technology, quality and cost and lays a foundation for its auto parts companies to develop external markets. Meanwhile, Great Wall Motor maintains a good partnership with Bosch, Continental and other international parts groups to jointly build a mature global parts supply system.

• 6. Targeted R&D to create value for users

  Faced with industry upheavals, Great Wall Motor adheres to its strategies of continuously and intensively developing core technologies, and insists on targeted R&D with a focus on developing clean, intelligent, and networked vehicles. Driven by intelligent technologies such as 5G and automatic driving, the Company devotes itself to providing users with agreeable and relaxed driving experience and new travel solutions.

• 7. Talent cultivation

  Focusing on the strategy of "growing stronger through talents" and upholding the philosophy of "cultivating personnel before making cars", the Company has developed a talent buildup system integrating introduction and internal training of talents. We have recruited and cultivated a large number of talents globally and created a unique and efficient personnel training system to provide a continuous stream of talents for the Company.

Section 4 Chairman's Statement

To all shareholders:

I am pleased to present the audited consolidated results of the Group for the year ended 31 December 2020.

BUSINESS REVIEW:

2020 has been an eventful year. The Chinese government took proactive and strict preventive measures to contain the spread of the COVID-19 pandemic. After the country started to get the pandemic under control, the government initiated resumption of work and production, thus boosting the rapid recovery of the economy. China's gross domestic product exceeded RMB100 trillion for the first time in history. The automotive industry, being a pillar industry of the national economy, became an integral part of the policies used to ensure people's livelihood and drive growth. The Chinese automotive industry made rapid post-pandemic recovery. According to the data from China Association of Automobile Manufacturers, the production and sales volume of automobiles amounted to 25,225,000 units and 25,311,000 units respectively, representing decreases of 2% and 1.9% year-on-year respectively; the aforesaid negative growth rates were significantly narrowed when compared with those of 2019. Under the impact of COVID-19 pandemic, the world encountered tremendous challenges and changes unseen in a century. After experiencing the COVID-19 period, Great Wall Motor has accelerated its transformation.

NEW ENERGY:

In the future, "peak carbon dioxide emissions" and "carbon neutrality" will be the central logic behind the drive to global energy revolution and energy structural transformation. Promoting crucial technologies that do not rely on fossil fuels and exploring the potential for zero and negative emissions are the key to energy conservation and emission reduction. We see that electric power and clean energy are the major directions for future energy revolution, and electricity and hydrogen energy will be key indispensable solutions. China is the world's largest consumer of automobiles. It is also one of the first countries engaging in new energy vehicle development, which has now evolved into one of the world's fastest growing industry with a well thought-out roadmap. Great Wall Motor is one of the few automobile companies that master three core technologies of new energy vehicles, namely battery, electric motor and electric control system. Great Wall Motor will further facilitate the rapid launch of more new energy products to enhance market competitiveness. With respect to fuel cell, Great Wall Motor has already completed the development of key hydrogen energy technologies, contributing to global energy saving and emission reduction. In the future, Great Wall Motor will build a new energy power model encompassing hybrid, pure electric and hydrogen energy that can be adapted to meet passenger and commercial requirements, thus providing a comprehensive and complete process new energy power solution.

INTELLIGENT CONNECTIVITY:

The blurring of boundary between automobiles and technology and intensified all-round vehicle-technology integration will be the trend in the future. Automobiles will be transformed from mechanical products into intelligent connected terminals. Great Wall Motor has established new benchmark for smart cars - integrating intelligent driving, smart cabins and smart services, and will develop new types of smart cars. In terms of vehicle intelligentization, Great Wall Motor has already launched models equipped with intelligent driving and smart cabins. In the meantime, the Group will accelerate the progress in smart services, in order to create a new business growth driver for Great Wall Motor. Data will be crucial for organising production in the future. Through implementing business data analytics, Great Wall Motor is proactive in achieving digital transformation. This will empower the Company and its products, as well as maximize the value of data. While strengthening the development of software, the Group will also focus on intelligent hardware, and further integrate the two to facilitate the rapid development of intelligent vehicle business.

Section 4 Chairman's Statement

GLOBALISATION:

Although China is the world's largest consumer of automobiles, it only accounts for one-third of global market. Two-third of the pie still awaits us to explore. In overseas vehicle markets, Great Wall Motor will launch products that resonate with local culture and conform with their customs. The Group will make a good job of product launch and marketing, demonstrating to foreign consumers the competitiveness of the Company's products. The Company will also increase investment in building its own brands to gain market recognition and establish a good reputation in overseas markets. In 2020, the official signing of the "Regional Comprehensive Economic Partnership Agreement" helped pave the way for the possible establishment of a China-Europe free trade zone and a China-Japan-Korea free trade area. Once again, all this proves that globalisation is inevitable and the world needs more Chinese brands and products. From a global perspective, a truly successful car brand is a global brand. Great Wall Motor will continue to enhance its product competitiveness and brand's competitive advantage, to become a globally recognized car brand.

ORGANISATIONAL CHANGE:

In 2020, Great Wall Motor put forth its objective to transform into a global technology-driven mobility company. To achieve this goal, we must make changes accordingly. Organisational mechanism, culture and people are where we should start with the changes. These three areas are the fundamental logic and core foundation for driving change. The changes we talk about with respect to brand, technology, products and services are the results of these three important elements. Changes on the outside will only come about after a fundamental change within.

We have established a "One car, one brand, one company" organisational mechanism. The user-centric mechanism works to cater to the market and users, instead of the management. A good organisational mechanism should serve as the engine of a company's innovation.

Nowadays, people is the number one driving force behind corporate development. Only by having the right people, can you get the right things done. Great Wall Motor's human resources practice is: "do not set any universal standard for people, and base our workforce planning on skills and capabilities". Under such strategic guidance, Great Wall Motor initiated the "Ten Thousand Talents Plan" and "Global Talents Plan" (Όଢɛʑݺ˥ࠇྌ). The Group attracts and recruits a large number of high-level talents in the automobile, internet and other high-tech industries from around the world.

The intrinsic value of culture is identification. Corporate culture serves as guidance and is the internal vitality of a company. In 2020, Great Wall Motor announced a new corporate culture encompassing mission/ vision, core values and corporate ideology: mission/vision refers to low carbon, environmental protection, intelligent connectivity, new wave, social circle, surprise and ultimate experience for users worldwide; core values refer to integrity, honesty, innovation, change, and a mutually beneficial ecosystem for the Company, its employees and partners; corporate ideology refers to the belief of making small improvements each day. We are now in the process of infusing the new corporate culture into each company, each team and each employee.

With the combined effect of the three key elements of our changes - organisational mechanism, people, and culture, Great Wall Motor's brand, products, sales and technology are experiencing new changes. At this moment, our transformation into a global technology-driven mobility company is taking shape. In the territory brimming with tremendous challenges and changes unseen in a century, we have now taken the first step.

Section 4 Chairman's Statement

CONCLUSION:

In the future, Great Wall Motor will speed up its reform to realize rapid product iteration and fast implementation of new technologies. Upholding strong beliefs, Great Wall Motor's employees, determined and courageous, will work together to win the Chinese market and go global, which is the Company's established development direction.

Wei Jian Jun

Chairman

Baoding, Hebei Province, the PRC 30 March 2021

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

I. Discussion and Analysis of the Business Operation of the Company

Operating Environment

2020 has been an unusual year. Facing the harsh and complex domestic and overseas environments, especially the severe blow from the COVID-19 pandemic, the Chinese government had responded with strong prevention and control measures against the pandemic. As a result, China made significant strategic achievements in preventing and controlling the pandemic, thereby promoting work and production resumption across the nation and realizing positive economic growth.

According to the National Bureau of Statistics, China achieved a gross domestic product ("GDP") of RMB101.6 trillion in 2020. For the first time in history the country's GDP exceeded RMB100 trillion, which made China the only major economy in the world to have a positive economic growth in 2020. Significant increase in the country's economic strength and continuous advancement in technology have laid a solid foundation for China's establishment of a new development pattern.

At the start of 2020, the unexpected outbreak of COVID-19 brought China's automobile industry to a standstill. However, with the pandemic gradually under control and promulgation of favourable government policies, the automobile market gradually recovered, witnessing slight decreases in production and sales volume; the impact of the pandemic was basically neutralized. According to data from China Association of Automobile Manufacturers, the production and sales volume of automobiles amounted to 25,225,000 units and 25,311,000 units respectively, representing decreases of 2% and 1.9% year-on-year respectively; the negative growth rates had narrowed by 5.5 and 6.3 percentage points year-on-year respectively. With respect to automobile industry development, as the national economy has resumed stable growth and the recovery of consumption demand will accelerate, it is expected that China's automobile market still has enormous potential.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Financial Review

Unit: RMB Currency: RMB

Total operating revenue

Operating revenue

From	From
1 January 2020 to	1 January 2019 to
31 December 2020	31 December 2019	Changes
(Audited)	(Audited)	%
103,307,607,209.70	96,210,688,818.80	7.38
103,307,607,209.70	95,108,078,639.52	8.62
Revenue from the sale of automobiles	92,385,913,305.90	86,251,409,500.45	7.11
Revenue generated from the sale of automotive parts and
components and others	10,921,693,903.80	8,856,669,139.07	23.32
Interest income (Note 1)	-	1,031,247,017.36	-100.00
Selling expenses	4,103,386,826.19	3,896,669,879.09	5.30
Administrative expenses (Note 2)	2,552,674,590.65	1,955,453,366.52	30.54
Research and development expenses	3,067,479,582.21	2,716,220,367.89	12.93
Financial expenses (Note 3)	396,962,230.25	-351,029,083.69	-
Gross profit	17,776,643,454.67	16,187,620,346.65	9.82
Income tax expenses (Note 4)	864,797,163.03	569,823,510.79	51.77
Net profit attributable to shareholders of the Company	5,362,490,194.32	4,496,874,893.92	19.25
Basic earnings per share	0.59	0.49	20.41
Increased by 0.38
Gross profit margin (%)	17.21	16.83	percentage point
Percentage of selling expenses to	Decreased by 0.13
operating revenue (%)	3.97	4.10	percentage point
Percentage of administrative expenses to	Increased by 0.41
operating revenue (%)	2.47	2.06	percentage point

(Note 1)	The decrease in interest income was mainly because Tianjin Great Wall Binyin Automotive Finance Company Limited has ceased
to be a subsidiary of the Company and become a joint venture company since June 2019 and thus its interest income was no
longer consolidated into the Company during the Reporting Period.
(Note 2)	The increase in administrative expenses was due to the year-on-year increase in management staff salaries and consulting service
fees during the Reporting Period.
(Note 3)	The increase in financial expenses was mainly due to an increase in exchange loss during the Reporting Period.
(Note 4)	The increase in income tax expenses was due to an increase in taxable income as a result of increased profits during the
Reporting Period.

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Current assets and current liabilities

Unit: RMB Currency: RMB

31 December 2020	31 December 2019
(Audited)	(Audited)
Current Assets	99,398,966,749.91	68,502,163,106.36
Including
Cash and bank balances	14,588,464,389.52	9,723,312,735.05
Held-for-trading financial assets	4,826,193,896.30	4,362,692,217.12
Accounts receivable	3,936,156,908.98	3,193,188,485.27
Receivables financing	52,984,556,339.76	31,445,748,809.31
Prepayments	570,917,965.02	441,162,238.54
Other receivables	1,032,243,323.43	946,974,372.15
Inventories	7,497,635,549.94	6,237,193,915.62
Non-current assets due within one year	1,884,739,784.73	807,562,885.35
Other current assets	11,580,488,006.85	11,343,946,670.26
Current Liabilities	81,165,712,444.73	54,599,801,076.22
Including
Short-term borrowings	7,901,303,207.55	1,180,470,655.50
Accounts payable	33,185,058,889.00	25,439,536,613.98
Notes payable	16,656,076,418.02	10,020,895,844.52
Contract liabilities	8,027,932,832.07	4,603,831,957.67
Employee benefits payable	2,530,652,915.21	2,094,259,980.68
Taxes payable	2,785,790,936.60	1,511,983,833.95
Other payable	4,116,969,285.61	2,481,286,817.71
Other current liabilities	5,065,113,514.41	4,087,539,918.81

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Gearing ratio

Unit: RMB Currency: RMB

31 December 2020	31 December 2019
(Audited)	(Audited)
Total liabilities	96,669,643,048.05	58,697,179,552.06
Total equity	57,341,847,584.19	54,399,229,916.90
Gearing ratio	168.58%	107.90%

Note: Gearing ratio refers to the proportion of total liabilities to total equity in the consolidated balance sheet.

Acquisition and disposal of assets

For details, please refer to the relevant descriptions of "Disposal of major assets and equity interest" in "The Principal Operation during the Reporting Period" in item II of this section of this report.

During the Year, the disposal of assets made by the Group were reported and announced in accordance with the requirements of Chapter 14A or Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Hong Kong Listing Rules").

Other than the above-mentioned disposal of assets, the Company and its subsidiaries and associated companies did not have material acquisitions or disposals of assets during the Reporting Period.

Capital structure

The Group mainly finances its day-to-day operations with its internal cash flows and bank borrowings.

As at 31 December 2020, the Company secured short-term borrowings of RMB7,901,303,207.55, mainly used as working capital. The Company secured long-term borrowings (including long-term borrowings due within one year) of RMB11,484,661,051.28, mainly used for the construction of factories domestically and aboard and as working capital. For details of interest rate of the borrowings, please refer to the relevant descriptions of Note (VI) to the financial statements in this interim report.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Exposure to foreign exchange risk

Foreign exchange risk represents risks of loss incurred as a result of changes in exchange rates.

Foreign currency assets and liabilities which may influence the Group's operating results due to foreign exchange risk are set out as below:

Unit: RMB Currency: RMB

31 December 2020	31 December 2019
Item	(Audited)	(Audited)
Cash and bank balances	1,371,070,081.90	578,788,984.45
Held-for-trading financial assets	244,394,136.00	76,585,824.00
Accounts receivable	484,028,321.56	523,220,468.89
Other accounts receivable	2,453,592,863.34	-
Accounts payable	-2,029,321,176.53	-41,582,710.36
Other payables	-91,950,695.75	-40,607,988.48
Short-term borrowings	-358,869,500.00	-
Long-term borrowings	-4,992,239,449.46	-2,253,013,663.75

The Group paid close attention to the impact of exchange rate changes on the Group's foreign exchange risk.

Employment, training and development

As at 31 December 2020, the Group employed a total of 63,174 employees (31 December 2019: 59,756 employees). Employees were remunerated by the Group based on their performance, experience and prevailing industry practices. The Group's remuneration policies and packages were reviewed on a regular basis. As an incentive for employees, bonuses and cash awards may also be given to employees based on individual performance evaluation. Total staff cost accounted for 9.19 % of the Group's total operating revenue as at 31 December 2020 (31 December 2019: 9.13%).

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Segment Information

The Group is mainly engaged in the manufacture and sale of automobiles and automotive parts and components in the PRC, and the majority of its assets are located in the PRC. The management determined the reporting segments according to the organization structure, management requirements and internal reporting system of the Group for the purposes of resource allocation and performance evaluation. As the resource allocation and performance evaluation of the Group are carried out based on the overall operation of the production and sales of automobiles and automotive parts and components, the Group has only one business segment for internal reporting purpose.

Operating revenue of the Group by geographical distribution of external customers is set out as follows:

For the 12 months ended 31 December

2020	2019
RMB	RMB
(Audited)	(Audited)
China	96,635,666,027.81	90,688,477,677.13
Russia	2,208,036,161.69	1,434,260,137.18
Saudi Arabia	1,084,156,092.64	720,431,670.58
South Africa	930,891,643.20	1,082,150,831.12
Australia	604,995,370.16	317,265,212.34
Chile	285,837,900.49	443,586,854.38
Other overseas countries	1,558,024,013.71	1,524,516,436.07
Total	103,307,607,209.70	96,210,688,818.80

The non-current assets of the Group located in other countries are not significant.

The Group is not dependent on one or a few major customers.

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Business Review

Analysis of production and sales volume of products

Sales volume (unit)

Production volume (unit)

Increase/
Total for	Total for	decrease
Car classification	Item	the year	last year	(%)
Pick-up truck	Domestic sales	209,859	147,408	42.37	-	-	-
Export	18,811	17,453	7.78	-	-	-
Sub-total	228,670	164,861	38.70	230,106	170,675	34.82
SUV	Domestic sales	780,572	808,471	-3.45	-	-	-
Export	48,437	43,785	10.62	-	-	-
Sub-total	829,009	852,256	-2.73	836,957	870,655	-3.87
Sedan (mainly NEVs)	Domestic sales	56,523	37,365	51.27	-	-	-
Export	1,670	4,166	-59.91	-	-	-
Sub-total	58,193	41,531	40.12	56,980	45,439	25.40
Total	Domestic sales	1,046,954	993,244	5.41	-	-	-
Export	68,918	65,404	5.37	-	-	-
Sub-total	1,115,872	1,058,648	5.41	1,124,043	1,086,769	3.43

Total for Total for decrease the year last year (%)

Increase/

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

The Group has four major brands, including Havel, WEY, ORA, and Great Wall Pickup. It offers three major products, namely SUVs, sedans and pick-up trucks as well as traditional energy vehicles and new energy vehicles. The Group boasts leading positions in the SUV and pick-up truck markets in China.

In 2020, facing various uncertainties as result of the pandemic, the Group underwent a "customer-oriented" metamorphosis, shifting from focusing on products to paying more attention to customers and accelerating its transformation into a global technology-driven mobility company. The Group had full understanding of the market and customer demand. Under the new technology brands, new product positioning strategies and new product naming, the Group continued to post record-high automobile sales volume. The Haval brand had a cumulative global sales volume of over 6,500,000 units, continuing to rank first in annual sales volume in China's SUV market for the 11th time. The WEY brand became the first Chinese luxury SUV brand with cumulative sales volume of 400,000 units. Great Wall Pickup continued to rank first in domestic and export sales volume for 23 consecutive years. The ORA brand remained at the forefront of the new energy industry.

In 2020, the Group's sales volume of automobiles increased by 5.41% year-on-year to 1,115,900 units. Amid a severe market environment, the Group was still able to achieve a sales volume of over 1 million units for five consecutive years; overseas sales volume amounted to 68,900 units, representing a year-on-year increase of 5.37%. The total operating revenue for the year reached a record high of RMB103.308 billion, representing a year-on-year increase of 7.38%; net profit amounted to RMB5.362 billion, representing a year-on-year increase of 18.36%.

Unit: RMB billion

Million units

The Group's total sales volume and total operating revenue in the past five years

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Looking back on 2020, the Group's shift from focusing on products to paying more attention to customers was a response to customers' demand, which has been the driving force behind the Group's constant metamorphosis.

1. Continued expansion of production network

In 2020, the Group established a strategic development direction of winning the Chinese market and going global, forming a "12+5" global production network.

In China, in order to be closer to markets and to reach its customers more effectively, the Group has established nine production bases. Operation of the production facilities in Baoding, Xushui, Tianjin, Chongqing and Yongchuan continues to improve. In June 2020, the factory of Spotlight Automotive project, a joint venture between Great Wall Motor and BMW Group, commenced construction in Zhangjiagang City, Jiangsu Province, marking the acceleration of progress of the new energy and globalization project. In October, Great Wall Motor and Jingmen municipal government signed a contract on the transfer of the production base in Jingmen, Hubei. The said plant is currently undergoing an upgrade and is expected to put into operation in 2021. The production base in Taizhou, Jiangsu was put into operation in November. Moreover, the production base projects in Rizhao, Shandong and Pinghu, Zhejiang were also making good progress.

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

The pandemic has brought great challenges to the global economy. That being said, the stable operation of the Group's plant in Tula, Russia enabled the Group to achieve localized production of various models including Haval F7, Haval F7X, Haval H9 with the aid of highly intelligent production technologies. Production capacity of the plant continued to increase and products produced were well received by the Russia market and the neighbouring markets. In November 2020, the Group and General Motors officially completed the transfer of the manufacturing plant in Rayong Province, Thailand. The plant in Rayong Province, Thailand, being an important production base for the Group's expansion of its presence in Thailand and the ASEAN markets, will be put into operation in 2021. Meanwhile, the proposed acquisition of a vehicle plant in India was also making smooth progress, while the production and sales of overseas KD projects continued to rise.

Fully integrated automobile manufacturing plants across the world

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

2. Continuous advancements in R&D network

The Group has established R&D centres in Japan, the US, Germany, India, Austria and South Korea, thereby building a global R&D network covering Europe, Asia and North America, with headquarters in Baoding, China. As at the end of 2020, the R&D team had grown to over 19,000 people, which accounted for over 30% of the Company's total number of employees.

Germany

Austria

Japan

the US

South Korea

China

India

Global R&D

With the aim to become a global technology-driven mobility company, the Group has insisted on "targeted investment" and pursues to be the number one in the industry with respect to R&D. The Group thus continued to enhance its competencies as a "Tech-driven Great Wall". In 2020, the Group launched three technology brands, dubbed "GWM LEMON", "TANK WEY" and "GWM COFFEE Intelligence", forming a technology ecosystem comprising intelligent driving, smart cabins, high fuel efficiency and new energy. Such will lay a solid foundation for future development.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Moreover, the Group launched "LEMON Hybrid DHT" in December 2020. It is a highly integrated, high-efficiency, multi-mode petrol-electric hybrid system with dual-motor hybrid technology to achieve an all-speed and all-scenario perfect balance between high efficiency and high performance. "LEMON Hybrid DHT" is independently designed and developed by the Group, which owns the proprietary intellectual property rights to the system, including a total of 199 patents. Of the total, 80 are core patents, heralding a historic breakthrough in core technologies. The aforesaid further consolidated the technology foundation for the Group to advance its globalisation strategy. As such, the system plays an important role in supporting the Group's globalisation. In the future, "LEMON Hybrid DHT" will be successively installed in the Group's new models, thus enabling the Group to launch more new energy models.

The Group also enhanced its intelligent driving strategy. It released COFFEE Intelligent Driving's "331 Strategy", with the aim to become the leader in autonomous driving in the era of intelligence. The "331 Strategy" means in the next three years, the Group will strive to become the number one in the industry by the number of customers, by customer experience and by the scope of solutions to driving scenarios.

In 2020, GW4N20 2.OT engine, which was self-developed by the Group, was named "China's Heart" 2020 Top 10 Engines for the seventh time. 7DCT was also awarded "World Top 10 Transmissions" for three consecutive years. In mid November, the Group officially commenced the mass-production of the new-generation powertrain, including GW4N20 engine, 9DCT/9HDCT transmission - the world's first transverse 9-speed wet dual-clutch transmission, and three-in-one electric drive system, covering efficient internal combustion, hybrid, and pure electric fields. The aforesaid signifies an important step made by the Group in independent research and development and provides strong technical support for the development of more new models on the Group's car platforms in future.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

• 3. Marketing model continued to change

  In 2020, the Group proactively adapted to new consumption trends to reflect its customer-centric culture and customer-oriented operation. Fully leveraging livestreaming, celebrity economy, e-commerce and the competitive edge of its dealer network, the Group had integrated its online-offline channels, creating a new sales and service model. Whether it is the naming of products such as ORA Mao, Haval Da Gou, and Haval First Love, or the naming of technology platforms "GWM LEMON", "TANK WEY" and "GWM COFFEE Intelligence", the Group has revolutionised the concept of "naming things", attributing "emotion" to automobiles. Throughout the promotion process of Haval Da Gou and WEY TANK 300, communication with customers had changed from one-way to two-way communication with interaction. Furthermore, the Group had also launched mobile apps, namely (۞̿౽࢕), (WEY ༸ ), (යޏϾБ) and ORA as a means of effective and direct communication with its customers. Using big data to analyse customer behaviour, the Group could carry out cross-industry collaboration with a broader scope of players, in order to provide customers with a variety of services and/or tools to meet their needs.

• 4. Continuous optimisation of organisation structure

  In 2020, the Group announced a new corporate culture encompassing mission/vision, core values and corporate ideology: mission/vision refers to low carbon, environmental protection, intelligent connectivity, new wave, social circle, surprise and ultimate experience for users worldwide; core values refer to integrity, honesty, innovation, change, and a mutually beneficial ecosystem for the Company, its employees and partners; corporate ideology refers to the belief of making small improvements each day. Meanwhile, the Group also removed job titles within the organisation and accelerated implementation of the job rotation programme as well as fine-tuned the performance appraisal mechanism. As a result, the Company's operational efficiency and quality had been improved.

  In terms of organisation structure, the Group used product strategy to set direction for product development, leveraged the four major brands to compete in different market segments, and created every model with a separate team. The research and development department, product digitization centre, ancillary parts procurement department, production technology department and sales company all worked together to facilitate business operations, while the functional units including finance department, human resources department, quality control department and enterprise digitalization centre helped support business operations. The Group succeeded in integrating intelligent driving, smart cabins and smart services.

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Major New Models Launched in 2020

2021 WEY VV6

Focusing on intelligent safety, 2021 Wey VV6 SUV is equipped with a 3-in-1 all-round intelligent safety system encompassing intelligent driving, smart cabin and intelligent connectivity and features new or upgraded technologies including vital signs monitoring, smart cabin cleaning and intelligent voice control, setting higher safety standards within the industry and providing around-the-clock and all-scenario safety protection for those who are family-centred and enterprising.

Great Wall POER - off-road versionGreat Wall POER off-road pickup is the first all-terrain, mass-produced off-road big pickup in China, featuring over ten exclusive off-road functionalities, with bold and rugged appearance and user-friendly interior design. Equipped with smart technologies such as smart driving assistance, it makes driving a pure joy. It also comes with the next-generation V2 platform, featuring multimedia functionalities, AI voice command recognition and remote control via vehicle networking, and offering an unprecedented experience in smart driving.

Third-generation Haval H6

The third-generation Haval H6 is the Group's first global strategic model on the "GWM LEMON" platform. As a blockbuster product of the Haval SUV series, the heavily upgraded model will continue to demonstrate its strength and ambition to be at the forefront of the industry and realize the upgrade from "intelligence" to "wisdom". FOTA upgrade is available for the third-generation Haval H6 model. In terms of interactive artificial intelligence, the model is equipped with an AI voice interaction system customized by iFlyTek which covers travel navigation, life services, control instructions, chatting & jokes, idioms solitaire and other functions and can accurately identify multiple intentions and ultra-long instructions, thus providing consumers with a more intelligent in-vehicle experience.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Haval Da Gou is derived from a brand-new platform created by the Group for the global market. High-strength lightweight panels are heavily used in its body, and the cross-section structure of its parts is optimized, which not only improves the rigidity of the vehicle but also achieves good lightweight performance. In addition, equipped with an intelligent four-wheel drive system, it can complete torque distribution to the rear axle within milliseconds, greatly improving the trafficability and off-road capability of the model. It also has an electronically

Haval Da Gou

controlled differential lock in the rear axle, which enhances its ability to free itself when it gets stuck in difficult situation. With an all-terrain control system provided by Bosch, a world-class supplier, the model has mud, sand and snow modes, which are only available on professional off-road vehicles, combining the comfort and practicality of urban SUVs and the trafficability of hard-core off-road SUVs.

TANK WEY 300

As the first new off-road model of WEY based on the Group's "TANK WEY" platform, TANK 300 is positioned as a compact SUV. It possesses three off-road weapons, zero-based off-road capabilities, and zero-threshold intelligent luxury, providing a unique luxury and intelligent experience while having strong off-road capabilities. It is equipped with three locks, tank U-turn and crawl mode, a professional non-load-bearing off-road chassis, 9 driving modes, 360° panoramic imaging, etc. In respect of design, TANK 300 absorbs the philosophical wisdom of "combining rigidity and flexibility" by integrating two basic Chinese traditional elements that are geometrically imaginative, namely "square" and "circle".

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

ORA Bai MaoPositioned as a model of the A00 class, ORA Bai Mao is designed and developed on the back of the Group's exclusive ME platform for pure electric vehicles. From its minimalist technology design to creativity in naming, ORA Bai Mao showcases the lifestyle and attitude pursued by the younger generation to live by their own definitions, just like a cat. A benchmark model among its peers, ORA Bai Mao is a highly inclusive product equipped with a 23-inch integrated screen,a design rarely seen in its peers, plus smart home networking, high-definition 360° panoramic image and more. Such high-tech fittings facilitate users of the vehicle that is easy to master. Meanwhile, powerful active and passive safety devices take good care of the safety of the whole family.

ORA Hao MaoThe A0 class pure electric SUV ORA Hao Mao originates from the Group's "GWM LEMON" platform and "GWM COFFEE Intelligence" system. Highly intelligent with a stylish look inspired by the retro-futuristic aesthetic design concept, it has a highly distinctive appeal that boasts the best of the ritualistic feel of revivalism and the technology touch of futurism. The trendy ORA Hao Mao demonstrates its unique character and style through the crossover of tradition and modernism.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Outlook

In 2021, rapid development of automotive technologies continues to be seen, especially in respect of new energy and smart vehicles. The Group will embrace the industry transformation and face new challenges with a new corporate culture, a new organisational structure, and new technologies.

In addition to pure electric power and hybrid power, the Group will also focus on fuel cell power. Basing on the newly launched "GWM LEMON" platform, the Group will complete the development of a hydrogen power vehicle platform in accordance with the different requirements of whole vehicle, powertrain, system, parts and materials. The Group will also continue to advance its core R&D technologies in respect of safety, cost, durability, performance, etc.

With the transition to smart cars, chips have been playing an increasingly important role in the automotive industry. The Group continues to closely monitor the development of the chip industry. At the beginning of 2021, the Group made a strategic investment in Beijing Horizon Robotics Technology R&D Co., Ltd ("Horizon Robotics"), thereby officially entering the chip industry. Through strategic investment, strategic cooperation and self-development, the Group will combine its years of achievement in intelligent technology with Horizon Robotics' advanced automotive smart chips and algorithm, with the aim to jointly build an intelligent connected ecosystem and realise industrialisation development, thus forming a matrix of two strong allies. Such will accelerate the Group's in-depth exploration of the chip industry and its strategic transformation into a global technology-driven mobility company.

In 2021, the Group will continue to be proactive and determined in escalating its transformation, creating new paradigms in the ever-changing environment to provide users around the globe with products and travel experience that could create more customer value and resonate with them. The Group is well poised to take China's automobile industry to new heights.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

New Models to be Launched in 2021

In January 2021, the Group launched the third new model based on GWM LEMON platform - Haval First Love, which is equipped with four industry-looking technologies, i.e. active emotion recognition system, face recognition plus voiceprint ID recognition for unlocking, scenario-based intelligence system and achievement system, as well as cutting-edge technologies such as 64-color ambient lighting, an entertainment system, three-screen intelligent linkage and automatic parking. The model redefines "the first car for young people".

In the first half of 2021, the Company will launch the fourth new model cum the first hybrid SUV on the GWM LEMON platform - Haval Chitu. This model is equipped with telematics to support a series of intelligent functions, including online navigation, remote control, remote diagnosis, Bluetooth key, OTA system upgrade, in-car Wi-Fi and wireless mobile phone interconnection (Carplay, Android Auto), which will provide customers with a seamless smart experience. Haval Chitu will be positioned as a powerful car for the new generation to target the entry-level compact SUV market, with a view to helping Havel expand the SUV market.

In addition to Haval, the WEY brand will launch WEY Mocha in the first half of 2021, which is a brand-new flagship model under the renewal of the Group's WEY brand and the first product based on the "GWM COFFEE Intelligence" platform. This model integrates world-leading technologies and embodies the leading technology strength of the WEY brand in the intelligence field. It is the first to be equipped with the world's first mass-produced car-grade all-solid-state lidar, Qualcomm 8155 flagship chip and the first mass-produced car-grade 5G+V2X wireless terminal, which are absolutely cutting-edge intelligent features. With the integration of "three intelligent features", the model can actively perform machine learning and quickly upgrade itself to bring a new travel experience to users.

In 2021, the Group will also launch a number of other fuel models, new energy models and modified models on the back of new platforms of GWM LEMON, TANK WEY and GWM COFFEE Intelligence to further promote sales and performance growth.

Tax incentives for high-tech enterprises

In accordance with the Notice Regarding the Announcement of the First Batch of the List of High-tech Enterprises to be Identified in Hebei Province in 2019 (ᗫ׵ʮͪئ̏޲2019ϋୋɓҭᏝႩ֛৷อҦஔΆุ Τఊٙஷٝ) issued by the Torch High-tech Industry Development Center of the Ministry of Science and Technology (߅Ҧ௅˦ދ৷Ҧஔପุක೯ʕː) on 10 September 2019, the Company was re-accredited as a high-tech enterprise in 2019 (valid for three years) and hence is entitled to an applicable income tax rate of 15% from 2019 to 2021.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

II. THE PRINCIPAL OPERATION DURING THE REPORTING PERIOD

During the Reporting Period, the total operating revenue, operating profit and net profit attributable to shareholders of the Company were RMB103,308 million, RMB5,752 million and RMB5,362 million, representing a year-on-year increase of 7.38%, 20.41% and 19.25%, respectively, as compared to the corresponding period of last year.

(I) Analysis of principal business 1. Analysis of changes in relevant items in income statement and cash flow statement

Unit: RMBcCurrency: RMB

For the	For the
Current	corresponding	Changes
Period	period last year	(%)	2018	2017	2016
Total operating revenue	103,307,607,209.70	96,210,688,818.80	7.38	99,229,987,202.20	101,169,488,827.86	98,615,702,427.24
Operating revenue	103,307,607,209.70	95,108,078,639.52	8.62	97,799,859,204.66	100,491,618,178.70	98,443,665,116.02
Operating costs	85,530,963,755.03	79,684,487,295.85	7.34	81,480,942,550.61	81,966,903,618.84	74,360,223,523.10
Selling expenses	4,103,386,826.19	3,896,669,879.09	5.30	4,575,198,601.16	4,406,397,762.23	3,175,424,411.26
Administrative expenses	2,552,674,590.65	1,955,453,366.52	30.54	1,676,303,700.58	1,598,465,449.58	1,394,460,474.44
Research and development expenses	3,067,479,582.21	2,716,220,367.89	12.93	1,743,379,055.09	3,364,573,281.17	3,180,236,419.29
Financial expenses	396,962,230.25	-351,029,083.69	-493,875,195.06	138,601,073.50	-3,858,556.40
Net cash flows from operating activities	5,181,232,925.84	13,972,302,434.79	-62.92	19,697,825,948.40	-1,059,294,783.95	8,835,406,234.02
Net cash flows from investing activities	-11,588,320,756.01	-15,801,684,305.19	-10,040,436,458.33	-3,072,997,093.57	-8,367,460,548.39
Net cash flows from financing activities	11,367,524,972.75	3,943,947,671.02	188.23	-6,500,837,532.69	6,089,261,843.31	-1,116,326,659.64

Item

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

2.

Revenue and cost analysis

√ Applicablec Not applicable

Refer to the following table for details

(1)Principal businesses by industries, products and regions

Industry

Operating revenuePrincipal businesses by industriesOperating costs

Unit: RMBcCurrency: RMB

Gross profit margin (%)Increase/ decrease in operating revenue over last year (%)Increase/ decrease in operating costs over last year (%)Increase/ decrease in gross profit margin over last year (%)

Automotive industry

Product

Sales of automobiles Sales of automotive

101,450,975,532.31 84,019,133,283.77

Operating revenuePrincipal businesses by productsOperating costs

92,385,913,305.90 77,956,373,070.18

parts and components 5,141,001,641.80 3,067,715,526.37 Sales of moulds

and others Rendering of labour services

Region

The PRCOverseas

• 1,232,666,141.99 862,390,425.80

• 2,691,394,442.62 2,132,654,261.42

Operating revenuePrincipal businesses by regionsOperating costs

94,793,901,810.43 77,699,818,109.89

6,657,073,721.88 6,319,315,173.88

17.18

8.18

6.98

Increased by 0.93 percentage point

Gross profit margin (%)Increase/ decrease in operating revenue over last year (%)Increase/ decrease in operating costs over last year (%)Increase/ decrease in gross profit margin over last year (%)

Increased by 0.82

15.62

7.11

• 6.08 percentage point

• Decreased by 1.33

  40.33

  19.77

• 22.50 percentage points Increased by 8.46

  30.04

  89.00

• 68.61 percentage points Decreased by 0.44

  20.76

  4.12

• 4.71 percentage point

Gross profit margin (%)Increase/ decrease in operating revenue over last year (%)Increase/ decrease in operating costs over last year (%)Increase/ decrease in gross profit margin over last year (%)

Increased by 1.51

18.03

7.38

• 5.44 percentage points

• Decreased by 6.77

  5.07

  20.97

• 30.26 percentage points

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Description of principal businesses by industries, products and regions

The Company is mainly engaged in the research and development, manufacture and sale of automobiles and key automotive parts and components. The principal business of the Company belongs to the automobile industry and its products include automobiles, automotive parts and components, moulds, labour services and others.

The domestic business was mainly located in the mainland China.

(2) Analysis of output and sales volume

√ Applicablec Not applicable

Major productUnitOutputSales volume Inventory

Increase/ decrease in output over last year (%)Increase/ decrease in sales volume over last year (%)Increase/ decrease in inventory over last year

(%)

Pick-up trucks SUVs

Unit Unit

230,106 836,957

228,670 829,009

9,756 38,856

Sedans (mostly new energy automobiles)

Unit

56,980

58,193

2,627

34.82 -3.87 25.40

38.70 16.46

-2.73 15.65

40.12 -44.07

Total

Unit 1,124,043 1,115,872

51,239

3.43

5.41

9.79

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

(3)Cost analysis

Industry

Currency: RMBcUnit: RMB

By industriesCost itemAmount for the Current

PeriodProportion to total costs for the

Current Period (%)Amount for the corresponding period last yearProportion to total costs for the corresponding period last year (%)Changes in the amount for the Current Period over the corresponding period last year

(%)Description

Automotive industry

Raw materials, labour wages, depreciation, energy, etc.

84,019,133,283.77

Amount for the CurrentProduct

98.23

78,539,622,949.05

By productsCost item

98.56

6.98

-

PeriodProportion to total costs for the

Current Period (%)Amount for the corresponding period last yearProportion to total costs for the corresponding period last year (%)Changes in the amount for the Current Period over the corresponding period last year (%)

Description

Finished automobiles

Raw materials, labour wages, depreciation, energy, etc.

Parts and components

Raw materials, labour wages, depreciation, energy, etc.

Moulds and others Raw materials, labour wages, depreciation, energy, etc.

Labour servicesFinished automobile maintenance service costs, transportation tolls, fuel costs, travel expenses, labour wages, etc.

77,956,373,070.18

3,067,715,526.37

862,390,425.80

2,132,654,261.42

• 91.14 73,487,141,119.05

• 3.59 2,504,209,784.27

• 1.01 511,484,525.69

• 2.49 2,036,787,520.04

92.22

6.08

-

3.14

22.50

-

0.64

68.61

-

2.56

4.71

-

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

(4) Major customers and suppliers

√ Applicablec Not applicable

Currency: RMB Unit: RMB

Proportion to
total operating
revenue of
Name of customer	Operating revenue	the Company (%)
Customer 1	3,561,028,092.61	3.45
Customer 2	2,535,790,315.94	2.45
Customer 3	1,735,863,311.08	1.68
Customer 4	1,368,746,003.79	1.32
Customer 5	1,313,286,894.16	1.27
Total	10,514,714,617.58	10.17

Sales to the five largest customers amounted to RMB10,514,714,600, accounting for 10.17% of the total sales of the Year, in which sales of RMB0 came from the related parties, accounting for 0% of the total sales of the Year.

During the Year, sales to the Group's five largest customers accounted for less than 30% of the Group's annual total sales. The directors did not consider that any customer had significant influence on the Group.

None of the directors, their associates or any shareholders (which, to the knowledge of the directors, own more than 5% of the Company's issued share capital) were interested in the major customers mentioned above.

Currency: RMB Unit: RMB

Proportion to
total purchases
Name of supplier	Purchases	for the Year (%)
Supplier 1	1,928,544,042.95	2.18
Supplier 2	1,566,756,519.04	1.77
Supplier 3	1,351,852,424.32	1.53
Supplier 4	1,207,269,276.06	1.37
Supplier 5	1,174,869,655.14	1.33
Total	7,229,291,917.51	8.18

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Purchases from the five largest suppliers amounted to RMB7,229,291,900, accounting for 8.18% of the total purchases of the Year, in which, purchases of RMB1,566,756,500 came from the related parties, accounting for 1.77% of the total purchases of the Year.

During the Year, purchases from the Group's five largest suppliers accounted for less than 30% of the Group's annual total purchases. The directors did not consider that any supplier had significant influence on the Group.

One of the above suppliers is a company indirectly controlled by Mr. Wei Jian Jun, a Director. The Company has carried out reporting, annual review, announcement and independent Shareholders' approval in accordance with the requirements of Chapter 14A of the Hong Kong Listing Rules. Save the above, the Directors and their associates or any Shareholder (who, to the knowledge of Directors, owns more than 5% of the issued equity interests in the Company) do not have any interest in any of the above-mentioned major suppliers.

3. Expenses

√ Applicablec Not applicable

Currency: RMB Unit: RMB

Items

2020

2019

ChangesReasons

• 5.30 -

• 30.54 The change in administrative expenses was mainly due to the year-on-year increase in the remuneration of management personnel and consulting service fee during the Reporting Period

• 12.93 -

The change in financial expenses was mainly due to the increase in exchange loss during the Reporting Period.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

4. Research and development expenses

• (1) Statement of research and development expenses

  √ Applicablec Not applicable

  Currency: RMB Unit: RMB

  Research and development expenses for the Current Period 2,275,132,990.19

  Research and development expenses capitalised for the Current Period 2,875,007,304.87

  Total research and development expenses 5,150,140,295.06

  Percentage of total research and development expenses over

  operating revenue (%) 4.99

  Number of research and development employees of the Company 19,347

  Percentage of the number of research and development employees

  over the total number of employees of the Company (%) 30.62

  Percentage of research and development expenses capitalised (%) 55.82

• (2) Description

  √ Applicablec Not applicable

  In 2020, the Company's total R&D expenditure was RMB5,150 million, representing a year-on-year increase of 21.22%.

  The Company has always attached importance to the research and development of new products and new technologies, adhered to "precise investment and pursuit of industry leadership", and focused on effective research and development, thereby laying a solid foundation for continuous independent innovation. During the Reporting Period, research and development expenses were mainly used for the research and development of finished vehicles, core parts and components, and new energy technologies. Thanks to continuous research, a number of newly-launched products have gained good sales momentum.

  As of 31 December 2020, Great Wall Motor Company Limited had been granted 8,215 patents, including 1,502 invention patents, 4,474 utility model patents and 2,239 industrial design patents.

  In 2020, Great Wall Motor Company Limited submitted 1,815 patent applications, and was granted 1,136 patents, including 272 invention patents, 549 utility model patents and 315 industrial design patents.

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

5.

Cash flow

√ Applicablec Not applicable

Currency: RMBUnit: RMB

Items

2020

2019

ChangesReasons

-15,801,684,305.19

13,972,302,434.79

3,943,947,671.02

-62.92

188.23

The change in net cash flows from operating activities was mainly due to the decrease in bill collection as a result of the year-on-year decrease in sales volume in the first half of the year caused by the COVID-19 epidemic. The changes in net cash flows from investing activities was mainly due to the fact that Tianjin Great Wall Binyin Automotive Finance Company Limited, a subsidiary of the Company, transformed into a joint venture enterprise in June 2019 and transferred out its cash and bank balances during the end of the period, resulting in an increase in cash outflow from investment activities in the same period last year

The change in net cash flows from financing activities was mainly due to an increase in net bank borrowings obtained during the Reporting Period

(II)Description of significant changes in profit of non-principal businesses

 Applicablec√ Not applicable

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

(III) Analysis of assets and liabilities

√ Applicablec Not applicable

1.

Assets and liabilities

Amount as at the end of the Current

ItemProportion to total assets for the amount as at the end of the Current Period (%)Amount as at the end of theProportion to total assets for the amountChanges in the amount as at the end of the

as at the Current Periodend of theover thecorresponding corresponding corresponding

Currency: RMBcUnit: RMB

Periodperiod last yearperiod last year (%)period last year (%)Description

2018

2017

2016

Cash and bank balances

14,588,464,389.52

• 9.47 9,723,312,735.05

Derivative financial assets

2,271,973.16

0.00

Accounts receivable Financing with receivables

3,936,156,908.98

2.56 3,193,188,485.27

52,984,556,339.76

34.40 31,445,748,809.31

Prepayments Other receivables Inventories Contract assets

570,917,965.02 0.37

380,777.69

441,162,238.54

1,032,243,323.43 0.67 946,974,372.15

7,497,635,549.94 4.87 6,237,193,915.62

8.60 50.04 The change in cash and bank balances was mainly due to the increase in borrowings during the Reporting Period.

0.00 496.67

2.82 23.27 -

27.80 68.50

0.39 29.41 -

0.84 9.00 -

5.51 20.21 -

495,298,612.22 0.32 100.00

The change in derivative financial assets was due to the change in the fair value of the forward foreign exchange contracts signed by the Company at the end of the Reporting Period.

The change in financing with receivables was mainly due to the year-on-year increase in sales volume in the second half of the year during the Reporting Period, leading to an increase in receivables in the form of bank acceptances.

The figure of contract assets at the end of the Reporting Period represents the new energy subsidy receivable by the Company pending approval of the government department and expected to be collected within one year.

• 7,682,083,569.01 4,831,349,324.85

• 3,343,220,862.42 873,444,976.66

2,153,603,558.38

517,976,746.97

31,883,667,949.34 49,075,108,590.70 39,786,248,863.34

440,800,952.34 651,737,776.25

• 579,536,182.06 1,057,180,423.77

• 326,247,513.83 263,429,992.67

4,445,104,832.92 5,574,771,949.63 6,061,138,217.68

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Amount as at the end of the Current

PeriodProportion to total assets for the amount as at the end of the Current Period (%)Amount as at the end of theProportion to total assets for the amountChanges in the amount as at the end of the

as at the Current Periodend of theover thecorresponding corresponding correspondingperiod last yearperiod last year (%)period last year (%)Description

2018

2017

2016

Non-current assets due within one year

1,884,739,784.73

1.22

807,562,885.35

Current assets Debt investments

99,398,966,749.91

64.54 68,502,163,106.36

70,000,000.00

Long-term receivables

2,445,172,072.69 1.59 1,295,037,499.26

Long-term equity investments

8,415,182,722.15 5.46 3,112,651,355.60

0.71 133.39

60.57 45.10 -

0.06 -100.00

1.15 88.81

2.75 170.35

Other non-current financial assets

24,500,000.00 0.02 100.00

Construction in progress

2,936,380,757.60 1.91 2,247,372,266.06

Right-of-use assets

238,889,308.01 0.16

Development expenditure

3,723,471,858.34 2.42

Long-term prepaid expenses

178,097,492.31 0.12

The change in non-current assets due within one year was mainly caused by the increase in financial lease receivables due within one year during the Reporting Period.

The change in debt investment was due to the transfer of debt investments by the Group during the Reporting Period.

The change in long-term receivables was mainly due to the increase in financial lease receivables due in over one year during the Reporting Period.

The change in long-term equity investment was mainly due to the capital increase in the joint venture Tianjin Great Wall Binyin Automotive Finance Company Limited (˂ݵڗ۬Ᏽვӛԓږፄ Ϟࠢʮ̡) during the Reporting Period.

The figure of other non-current financial assets at the end of the Reporting Period represents the fair value of the fund company in which the Company invests.

1.99 30.66

The change in construction in progress was mainly due to the increased investment in plant construction.

100,421,181.38

0.09 137.89

The change in right-of-use assets was mainly due to the increased leases by the Group during the Reporting Period.

2,188,699,764.12

1.94 70.12

The change in development expenses was mainly due to the increase in R&D input by the Group during the Reporting Period.

112,345,772.69

0.10 58.53

The change in long-term prepaid expenses was mainly due to the increase in land improvement expenses at the end of the Reporting Period.

12,440,648,243.17 7,447,875,069.05 1,201,702,064.95

66,126,293,810.75 69,293,328,092.50 53,928,033,538.56

70,000,000.00

145,875,825.39

4,405,617,743.58

1,361,193,481.58

4,878,838,563.57 4,859,178,711.02

1,853,380,455.31

125,728,779.61

132,678,241.54

54,066,910.08

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Amount as at the end of the Current

PeriodProportion to total assets for the amount as at the end of the Current Period (%)Amount as at the end of theProportion to total assets for the amountChanges in the amount as at the end of the

as at the Current Periodend of theover thecorresponding corresponding correspondingperiod last yearperiod last year (%)period last year (%)Description

2018

2017

2016

Other non-current assets

Deferred tax assets

1,183,302,566.37 0.77

684,277,716.19

0.61 72.93

981,595,216.15 0.64 100.00

Short-term borrowings

7,901,303,207.55

5.13 1,180,470,655.50

1.04 569.33

Derivative financial liabilities

4,879,853.91

0.00 100.00

Notes payable

16,656,076,418.02

10.81 10,020,895,844.52

Accounts payable

33,185,058,889.00

21.55 25,439,536,613.98

Contract liabilities

8,027,932,832.07

5.21 4,603,831,957.67

Employee benefits payable

2,530,652,915.21

1.64 2,094,259,980.68

8.86 66.21

22.49 30.45

The change in deferred tax assets was mainly due to the increase in outstanding reimbursement to dealers and deductible losses during the Reporting Period. The figure of other non-current assets at the end of the Reporting Period was mainly the new energy subsidy receivable by the Company pending the approval of the government department and expected to be collected in more than one year and the project acquisition money paid by the Group.

The change in short-term loans was due to the increase in short-term loans obtained from banks during the Reporting Period. The change in derivative financial liabilities was due to the change in the fair value of forward foreign exchange settlement and sales contracts signed by the Group at the end of the Reporting Period.

The change in notes payable was mainly due to the increase in payment methods for pledged invoicing during the Reporting Period.

The change in accounts payable was mainly due to the increase in materials purchases during the Reporting Period as compared to the end of the previous year, which resulted in an increase in accounts payable.

4.07 74.38

The change in contract liabilities was mainly due to the increase in the payments for vehicles received in advance at the end of the Reporting Period.

1.85 20.84 -

676,536,944.72

691,008,604.27 963,955,022.84

12,799,966,582.00 13,037,978,000.00 250,000,000.00

4,205,233,491.00 3,879,647,201.41 4,164,982,676.22

25,196,407,749.32 27,961,741,670.91 25,007,335,076.72

3,433,904,092.43

2,060,853,914.65 1,872,028,903.98 1,966,848,264.70

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Amount as at the end of the Current

PeriodProportion to total assets for the amount as at the end of the Current Period (%)Amount as at the end of theProportion to total assets for the amountChanges in the amount as at the end of the

as at the Current Periodend of theover thecorresponding corresponding correspondingperiod last yearperiod last year (%)period last year (%)Description

2018

2017

2016

Taxes payable

2,785,790,936.60

1.81 1,511,983,833.95

Other payables

4,116,969,285.61

2.67 2,481,286,817.71

Non-current liabilities due within one year

891,934,592.35

0.58 3,179,995,453.40

Other current liabilities Current liabilities Long-term borrowings

5,065,113,514.41

3.29 4,087,539,918.81

81,165,712,444.73

52.70 54,599,801,076.22

10,777,205,207.80

7.00 1,205,655,653.71

Lease liabilities

495,284,830.49 0.32

Deferred income

3,461,818,011.07 2.25

1.34 84.25

2.19 65.92

2.81 -71.95

3.61 23.92 -

48.28 48.66 -

1.07 793.89

59,180,216.30

0.05 736.91

2,192,963,937.85

1.94 57.86

Long-term employee benefits payable

71,927,409.33 0.05 100.00

Other non-current liabilities

153,975,160.01 0.10 150,164,008.01

The change in taxes payable was mainly due to the increase in income tax, value-added tax and consumption tax payable.

The change in other payables was mainly due to the increase in payables for engineering equipment at the end of the Reporting Period.

The change in non-current liabilities due within one year was mainly due to the repayment of loans by the Group during the Reporting Period.

The change in long-term borrowings was due to the increase in long-term borrowings obtained from banks during the Reporting Period.

The change in lease liabilities was mainly due to the increase in leases by the Group during the Reporting Period.

The change in deferred income was mainly due to the increase in government subsidies received during the Reporting Period.

The figure of long-term employee benefits payable at the end of the Reporting Period was the long-term pension insurance payable that the Company needed to undertake.

0.13 2.54

-

2,551,412,583.25 2,308,154,256.08 1,978,393,497.86

2,916,697,689.61 2,568,250,538.41 2,044,621,071.17

142,533,396.22

105,170,607.29

1,214,941,169.33 1,422,960,496.15

1,653,117,141.98

54,379,417,271.59 43,252,239,792.29

58,881,223,748.49

2,157,805,500.00

423,754,500.00

49,800,000.00

150,164,008.01 1,963,520,037.00 1,651,147,352.90

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

• 2. Restrictions on major assets as at the end of the Reporting Period

  √ Applicablec Not applicable

  Item

  Carrying amount at

  the end of the year

  Currency: RMBcUnit: RMB

  Reason for restriction

  Cash and bank balancesNotes receivable Intangible assets Long-term receivables

  996,973,384.29

  15,720,649,546.68 83,101,819.13 1,494,547,087.96

  Bank acceptance deposits,

  L/C Guarantee deposits, guarantee deposits and others

  Used for issuance of notes payable Used for long-term borrowings Used for long-term borrowingsTotal

• 3. Description of other matters

  18,295,271,838.06

   Applicablec√ Not applicable

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

(IV) Analysis of operation information by industries

√ Applicablec Not applicable

Refer to the following table for details

Analysis of operation information of automobile manufacturing industry

1.

Production capacity

√ Applicablec Not applicable

Current production capacity

√ Applicablec Not applicable

Production
capacity	Utilisation
Designated	during the	rate of
production	Reporting	production
capacity	Period	capacity
Major factory	(10,000 units)	(10,000 units)	(%)
Baoding (including
Xushui Vehicle Factory)	70	63.98	91.40
Tianjin	30	35.06	116.87
Chongqing	16	11.34	70.89
Russia	8	1.56	19.44
Taizhou	10	0.47	4.67
Total	134	112.40	83.88

Note: As Taizhou Automobile Factory was officially put into use on 24 November 2020, it has been in operation for a short period of time, hence the low utilisation rate of production capacity.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Production capacity of factories under construction

 Applicablec√ Not applicable

Calculation standards of production capacity

√ Applicablec Not applicable

The designated production capacity is calculated based on two shifts (a total of 16 hours) per day for 250 days.

• 2. Output and sales volume of vehicles

  √ Applicablec Not applicable

  By types of vehicles

  √ Applicablec Not applicable

  For details, please refer to the relevant description in "Analysis of production and sales volume of automobiles" in "Business Review" of item I "Discussion and Analysis of the Business Operation of the Company" of this section.

  By regions

  √ Applicablec Not applicable

  For details, please refer to the relevant description in "Analysis of production and sales volume of automobiles" in "Business Review" of item I "Discussion and Analysis of the Business Operation of the Company" of this section.

• 3. Output and sales volume of parts and components

   Applicablec√ Not applicable

  The revenue from external sales of manufacturing of automotive parts and components accounted for 4.98% of the total operating revenue of the Company, which is not subject to disclosure.

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

• 4. New energy automobile business

  √ Applicablec Not applicable

  Production capacity of new energy automobile

  √ Applicablec Not applicable

  Note: Currently, new energy products and traditional automobile products are manufactured on the same production line to share production capacity. The Company adopts a flexible approach to coordinate the production of these two types of products in response to market conditions.

  Output and sales volume of new energy automobiles

  √ Applicablec Not applicable

  Sales Volume (unit)	Production Volume (unit)
  Increase/	Increase/
  Total for Total for decrease	Total for Total for decrease
  Car classification	the year last year (%)	the year last year (%)
  New energy automobiles

  58,611 37,751

  55.26

  Revenue from and subsidy for new energy automobile business

  √ Applicablec Not applicable

  Car classification

  56,810 41,977

  35.34

  Unit: RMBcCurrency: RMB

  Subsidy for new energy automobile

  Revenue

  business Percentage (%)

  New energy automobiles

• 5. Auto financial business

   Applicablec√ Not applicable

• 6. Description of other matters

   Applicable √ Not applicable

3,961,800,954.40

904,534,614.45 22.83

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

(V)Analysis of investments

1.

General analysis of external equity investments

√ Applicablec Not applicable

During the Reporting Period, the total equity investment of the Group was RMB5,974,407,100, representing an increase of 9.47% as compared with RMB5,457,329,300 in the corresponding period of last year.

(1)Major equity investment

√ Applicablec Not applicable

Investment
Name of	amount	Percentage of
(RMB10,000)	shareholding
55,000.00	50%

Investee

Principal business

Spotlight

Automotive Ltd. (ΈҼӛԓ Ϟࠢʮ̡)

Engaged in the research, development, manufacture and full export sales of ICE (Internal Combustion Engines) vehicles; research, development, manufacture and sale of automotive spare parts and components; research, development, manufacture and sale of new energy vehicles (including battery electric vehicles); export of whole vehicles and their spare parts, components and accessories (except for imports and exports of goods and technologies prohibited by the State or for which administrative approval is required); provision of after-sale services; purchase and sale of automotive accessories; warehousing services; road freight transportation services; provision of relevant training (excluding the training through which the trainees would be able to obtain nationally-recognized vocational certificates), consulting, experiment and technical services.

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Name of InvesteePrincipal businessInvestmentamount Percentage of

(RMB10,000)shareholding

Honeycomb Yichuang Technology Co., Ltd. (໶੫׸௴߅Ҧ Ϟࠢʮ̡)

Research and development, manufacture, examination, testing, trial production, design and technical services, consulting services, transfer of technology, sale and after-sales services of automotive parts, components and accessories, engines and relevant components, transmissions and relevant components, decelerators and relevant components, new energy generators and relevant components, new energy controllers and relevant components, smart steering systems and relevant components, automated driving systems and relevant components; manufacture of electrical and mechanical equipment; repair of automotive parts and components; transportation of ordinary goods; warehousing (excluding flammable and explosive hazardous chemicals) services; leasing of self-owned properties and equipment; proprietary and agency businesses of import and export of commodities other than the export businesses centrally and jointly monopolized by the State authorities and the import businesses traded by the State-approved companies; corporate image planning services; public relations services; conference services.

19,300.00 100%Rizhao Weiyi Motor Co., Ltd. (˚๫۾ۯӛԓ Ϟࠢʮ̡)

Manufacturing of automobiles and components, accessories thereof; production, development, design, research and development and technical services, processing agency and sale of accessories and provision of after-sale services and consultation services thereof; auto information technology services; manufacturing of electronic and mechanical equipment; processing and manufacturing of moulds; manufacturing of intelligent key general component; repair and maintenance of automobiles; general cargo freight transportation and special transportation; storage services (excluding dangerous chemicals); export of components and accessories of automobiles manufactured and purchased by the Company; import and export of goods and techniques; leasing out self-owned buildings and equipment; sales of lubricants, automotive apparel, automotive decorations, general merchandise, and electronic hardware and products (excluding electronic publications); consulting services of automotive sales information; automotive maintenance technical consultation; used car dealing; automobile rental (shall not engage in the operations of leasing passenger transportation and passenger and freight road transportation); registration agents; transfer agency services; design, production and sale of motor batteries; services and sales of application software.

12,000.00 100%

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Name of InvesteePrincipal businessInvestmentamount Percentage of

(RMB10,000)shareholding

Tianjin Great Wall Binyin Automotive Finance Co., Ltd. (˂ݵڗ۬Ᏽვ ӛԓږፄ Ϟࠢʮ̡)

Accepting time deposits with a term of no less than three months from domestic shareholders; accepting security deposits from automobile dealers for automobile purchasing loans and from lease deposits from leasee for automobile leasing; issuing of financial bonds upon approval; engaging in inter-bank lending business; obtaining loans from financial institutions; providing automobile purchasing loans; offering loans to automobile dealers for purchasing automobiles and operating equipment, including exhibition halls construction loans, loans to automotive parts and components as well as equipment maintenance; engaging in automobile finance leasing business (excluding sale and leaseback business); sale or repurchase of automobile loan receivables and automobile finance leasing receivables to or from financial institutions; engaging in sales and disposals of residual value of leased automobiles; engaging in consultation and agency business relating to automobile purchase financing activities; engaging in equity investment in financial institutions relating to automobile financial business, upon approval; and engaging in other businesses approved by the China Banking Regulatory Commission.

450,000.00 98.18%Tianjin Zhixin Financial Guarantee Co., Ltd. (˂ݵ౽ڦፄ༟ ዄڭϞࠢʮ̡)

Financial guarantee business.

10,000.00 100%

Shanghai Yuefan Information Technology Co., Ltd.

(ɪऎٔعڦࢹ

߅ҦϞࠢʮ̡)

Engaged in the technical development, technical consulting, technical services and technical transfer in the fields of information technology and Internet technology, software development, sales of electronic products, business information consultation, enterprise management consultation, and marketing planning.

Shanghai Junying Enterprise Management Partnership Enterprise (Limited Partnership) (ɪऎඓᖊΆุ ၍ଣΥྫΆุ €ϞࠢΥྫ))Enterprise management services and enterprise management consultation.

19,000.00 100%

2,100.00 49.98%

Section 5

Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

Name of InvesteePrincipal businessInvestmentamount Percentage of

(RMB10,000)shareholding

HWA Ding International Limited (ശཻ਷ყ Ϟࠢʮ̡)International trade, equity investment, investment and financing services.

6,068.45 100%India Haval Automobile Private Co., Ltd. (Ιܓ۞̿ӛԓ ӷɛϞࠢʮ̡)Import and export, sale, leasing and maintenance of automobiles, automotive parts and related products

972.26 100%Haval Motor Manufacturing Russia Limited Liability Company (ڶᖯ౶۞̿ӛԓ ႡிϞࠢப΂ʮ̡)

1.Marketing, sale, promotion as well as production and manufacturing of automobiles, automotive parts, components and accessories and any other relevant operating activities, including intermediary trading activities and foreign trading activities;

• 2. Providing technical maintenance and repair services for motor vehicles and other types of technical maintenance services for motor vehicles;

• 3. Carrying out financial intermediary activities in the sales of automobiles and commuting vehicles.

• (2) Major investment in non-equity interest

   Applicablec√ Not applicable

• (3) Financial assets measured at fair value

  √ Applicablec Not applicable

Item

Financial assets at fair value through profit or loss Including: Equity instrument investments

Debt instrument investment - wealth management products

23,000.00 100%

RMB

244,394,136.00 4,581,799,760.30

Derivative financial assets 2,271,973.16

Other non-current financial assets 24,500,000.00

Financial assets classified as at fair value through other comprehensive income

Including: Financing with receivables - notes receivable Other equity instrument investments

52,984,556,339.76 7,700,000.00

Total

57,845,222,209.22

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

• (VI) Disposal of major assets and equity interest

  √ Applicablec Not applicable

  On 19 June 2020, the Company entered into an equity transfer agreement with Chongqing Lingkan Enterprise Management Co., Ltd. (ࠠᅅჯᐚΆุ၍ଣϞࠢʮ̡) (hereinafter referred to as "Chongqing Lingkan"), pursuant to which, the Company transferred the 100% equity interest it held in Chongqing Chuangban Enterprise Management Co., Ltd. (ࠠᅅ௴МΆุ၍ଣϞࠢʮ̡) (hereinafter referred to as "Chongqing Chuangban"), to Chongqing Lingkan by means of agreed transfer. The agreed price of the equity transfer was RMB656,648,600. All of the equity transfer payment shall be made in cash. Upon completion of the equity transfer, the Company will no longer hold any equity interest in Chongqing Chuangban. The disposal will not have a significant impact on the Company's financial position and operating results. On 24 June 2020, relevant procedures for changing industrial and commercial registration were completed. For details, please refer to the announcement published by the Company on 19 June 2020 in designated media for information disclosure.

• (VII) Major subsidiaries and investees

  √ Applicablec Not applicable

  Information of subsidiaries and investees contributing more than 10% of net profit of the Company

Currency: RMB Unit: RMB

Major subsidiaries and investeesBusiness natureRegistered capital

Proportion of shareholdingProportion of voting rights

(%)

(%)Total assets as at the end of the YearTotal net assets as at the end of the YearOperating revenue for the Year

Operating profit for the Year

Net profit for the Year

Tianjin Great Wall Binyin Automotive Finance Automotive Finance

6,600,000,000

98.18

• 50 38,796,627,108.88 8,711,516,316.15

  2,920,527,314.25 1,332,142,712.95 1,013,273,675.78

  Company Limited (˂ݵڗ۬Ᏽვӛԓږፄ Ϟࠢʮ̡)

  Chongqing Yongchuan Great Wall Auto Parts Co., Ltd. (ࠠᅅ̹͑ʇਜڗ۬ ӛԓཧ௅΁Ϟࠢʮ̡) Nuobo Automotive Systems Co., Ltd.

  Sale of auto parts

  30,000,000

  100

• 100 30,761,133,650.35 2,401,897,673.85

  40,067,521,122.04 2,617,543,772.56 2,380,414,636.80

  Manufacturing of automotive parts

  2,283,000,000

  100

• 100 10,378,889,454.79 3,871,364,434.93

  10,164,942,159.62 1,488,946,444.40 1,283,097,827.10

  (ፕ௹ӛԓӻ୕Ϟࠢʮ̡) and componentsJingcheng Engineering Automotive Systems Co., Ltd. (ၚ༐ʈ߅ӛԓӻ୕ Ϟࠢʮ̡)Manufacturing of automotive parts and components

  1,000,000,000

  100

• 100 9,321,592,686.00 2,549,649,291.63

8,696,814,793.46 1,107,835,366.03

962,042,330.94

(VIII) Structured entities under the control of the Company

 Applicablec√ Not applicable

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

III. DISCUSSION AND ANALYSIS CONCERNING THE FUTURE DEVELOPMENT OF THE COMPANY

(I) Landscape and development trend of the industry

√ Applicablec Not applicable

An unexpected coronavirus pandemic swept the world in 2020, which had a major impact on the world economy, security and development trend. Facing the challenging situation arising from the pandemic as well as the complex and volatile environment at home and abroad, the whole automobile industry stood side by side, not afraid of difficulties and resolutely carried out the decisions and plans of the Party Central Committee and the State Council by resuming work and production in a solid way, accelerating the transformation of marketing methods and boosting more automobile spending, so that the automobile market began to pick up gradually despite a slight yet steady decrease in the annual growth rate of production and sales, suggesting that the impact of the pandemic was almost fought off as the automobile industry as a whole began to come up with strong development resilience and internal driving force.

In 2020, 25,311,000 units of vehicles were sold in China, a year-on-year decrease of only 1.9%, and the rate of decrease was significantly narrowed by 6.3 percentage points from the previous year, making China rank first in the world in terms of auto sales volume for 12 years in a row. Of this sales volume, 1,367,000 units of new energy vehicles were sold, a year-on-year increase of 10.9%, which hit a record high. Based on monthly data, since April 2020 China's automobile production and sales have been growing positively for nine consecutive months, and the sales growth rate has been standing at above 10% for seven consecutive months. In 2020, the automobile industry performed better than expected on the whole.

2021 marks the beginning of the "14th Five-Year Plan". From the perspective of economic development, China's economy will continue to run within a reasonable range as government departments continue to consolidate and expand the achievements made by pandemic prevention and control as well as economic and social development; coordinate development and security in a better way; improve the stability of six economic aspects; carry out the "six guarantees" tasks; and implement the macroeconomic policies in a scientific and accurate manner. However, as the pandemic and the external environment remain very uncertain, the economy will continue to be subject to downside pressure. From the perspective of the development trend for the automobile industry, based on the steady recovery of the national economy, faster rise in consumer demand together with the enormous potential of the Chinese automobile market as a whole, the China Association of Automobile Manufacturers projected that the automobile industry will achieve recovery and positive growth in 2021, with over 26,000,000 units estimated to be sold, a year-on-year increase of 4%, and 1,800,000 units of new energy vehicles estimated to be sold, a year-on-year increase of 40%.

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

(II) Development strategy of the Company

√ Applicablec Not applicable

Stepping up research and development efforts in intelligent technology, new energy and other advanced technologies to provide customers with comprehensive intelligent mobility solution.

Adhering to its globalization strategy, the Company has focused on business expansion in strategic markets worldwide while accelerate the establishment of a global system comprising research, production and sale of automobiles to facilitate its transformation into a global technology-driven mobility company.

• (III) Operational plan

  √ Applicablec Not applicable

  Setting a foothold surpassing international benchmarks, Great Wall Motor will maintain its focus on product quality with delicate sensation and reliability as core elements. By strengthening the preliminary product planning, it will build up technology development capabilities and improve product capabilities on an ongoing basis; The Company will deepen its global strategic planning and open a new chapter in the market with its multi-brand planning.

• (IV) Potential risks

  √ Applicablec Not applicable

  Set out below are the four major potential risks that the Company may be exposed to:

  • 1. The uncertainties arising from the pandemic and global politics weigh on the automobile industry, posing great challenges to automobile business;

  • 2. The competition in automobile market, intensified by the popularity of joint venture brands attributable to their good reputation built over the years and the explosion of independent brands attributable to their product development and branding capabilities, will further divide the market, resulting in shrinking market share and decreasing profitability of lesser-known brands;

  • 3. Consumption upgrade in the new era seeking value enhancement leads to new change in the trend shifting toward high-end products, that is, the pursuit of product diversity as well as better user experience;

  • 4. A new round of technological revolution represented by the development of 5G, AI, cloud computing, big data and communications equipment drives the in-depth integration of traditional automobiles and technologies, accelerating the development of intelligent network-connected automobiles;

Section 5 Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)

In light of the above potential risks, the Company has taken the following major measures:

• 1. Actively promoting globalization: The Company will continue to improve global operations capability and focus on operational quality to achieve increase in both brand awareness and sales volume;

• 2. Adhering to customer operations: The Company will focus on customer to precisely identify their personalized needs, establish a comprehensive customer service platform covering all scenarios to achieve co-innovation and co-development between customers and the Company, and strengthen its brand to capture market share its competitors;

• 3. Accelerating digital transformation: In an effort to transform from a traditional manufacturer to a tech firm, the Company embraces digital transformation without wavering, challenges industrial Internet, and accelerate the research and development and application of cutting-edge technology such as internet of automobiles, autonomous driving and artificial intelligence by means of excessive investment and precise research and development;

• 4. Continuing with organizational reform: To resolutely implement the operation principle of "One Car, One Brand, One Company", the Company prepare itself for the market, customers and competition, coordinate resources to swiftly adapt to market changes, improve operational efficiency, and build diversified and differentiated teams.

(V) Others

 Applicablec√ Not applicable

IV. DETAILS OF AND REASONS FOR THE ISSUES NOT DISCLOSED BY THE COMPANY IN

ACCORDANCE WITH THE STANDARDS DUE TO INAPPLICABILITY OR OTHER SPECIAL REASONS SUCH AS INVOLVEMENT OF STATE OR COMMERCIAL SECRETS

 Applicablec√ Not applicable

Section 6cReport of the Board

The Group is principally engaged in the design, research and development, manufacture and sale as well as distribution of SUVs, sedans, pick-up trucks and automobile-related parts and components. There was no significant change in the nature of the Group's principal business during the Year.

The subsidiaries of the Company established in the PRC during the year ended 31 December 2020 or in previous years are limited companies.

I. DISCUSSION AND ANALYSIS OF THE BOARD CONCERNING THE OPERATION OF THE COMPANY DURING THE REPORTING PERIOD

Please refer to the "Discussion and Analysis of the Business Operation of the Company (Management Discussion and Analysis)" in item I and "The Principal Operation during the Reporting Period" in item II of Section 5 of this report.

• II. DISCUSSION AND ANALYSIS OF THE BOARD CONCERNING THE FUTURE DEVELOPMENT OF THE COMPANY

  Please refer to "Discussion and Analysis concerning the Future Development of the Company" in item III of Section 5 of this report.

• III. RESULTS AND DIVIDENDS

  The Group's operating results for the year ended 31 December 2020 and the financial positions of the Company and the Group for the year ended 31 December 2020 are set out in the audited financial statements.

  Details of distribution of the final dividend for the year ended 31 December 2020 are set out under "Profit Distribution Plan for Ordinary Shares or Plan for Capitalisation of Capital Reserves" of Section 8 "Significant Events" of this report.

• IV. SHARE CAPITAL

  Details of movements of the share capital of the Company as at 31 December 2020, together with the reasons for such movements, are set out under "Changes in Ordinary Shares and Shareholders" of section 9 of this report.

• V. FIXED ASSETS

  Details of the fixed assets of the Group and the Company as at 31 December 2020 are set out in the audited financial report.

• VI. PRE-EMPTIVE RIGHTS

  There are no provisions for pre-emptive rights that require the Company to offer new shares to its existing shareholders on a pro rata basis under the Articles or the Company Law.

• VII. RIGHTS TO ACQUIRE SHARES OR DEBENTURES

  At no time during the Year was the Company, its subsidiaries or fellow subsidiaries a party to any arrangement to enable the directors, supervisors and chief executives of the Company to receive benefits by means of the acquisition of shares in, or debentures of, the Company or any other legal entities.

Section 6cReport of the Board

• VIII. UNDISTRIBUTED PROFITS

  As at 31 December 2020, pursuant to the Company Law and the Articles, the undistributed profits of the Group amounted to RMB40,994,784,827.03. The Company has implemented the profit plan for the first three quarters of 2020, pursuant to which it distributed a cash dividend of RMB0.28 (tax inclusive) per share to all shareholders, with a total cash dividend of RMB2,569,266,924.00 (tax inclusive) distributed. The cash dividends distributed in 2020 accounted for 47.91% of the Company's net profit attributable to shareholders of the Company for 2020. Having comprehensively considered the Company's profit distribution for the first three quarters of 2020, and the Company's actual operating conditions, in order to achieve sustainable development for the Company, deliver better performance to give back to shareholders, and better safeguard the long-term interests of the Company and all shareholders, the Company did not plan to distribute profit for the final period of 2020, and will not carry out capitalisation issue. The undistributed profit will be used for investment in the Company's existing projects with its own funds and to meet the funding needs of new projects in the future.

• IX. MAJOR CUSTOMERS AND SUPPLIERS

  Please refer to the paragraphs headed "The Principal Operation during the Reporting Period" under item II of Section 5 of this report.

• X. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

  A list of the Company's directors, supervisors and senior management who held office during the Year and up to the date of this report and their biographies are set out in Section 11 "Directors, Supervisors, Senior Management and Employees" of this report.

• XI. MATERIAL CONTRACTS

  Please refer to the paragraphs headed "Disposal of major assets and equity interest" under item II "The Principal Operation during the Reporting Period" in Section 5 of this report.

• XII. MANAGEMENT CONTRACTS

  No contract concerning the management or administration of the Company's entire business or material business was entered into during the Year.

• XIII. DIRECTORS' AND SUPERVISORS' INTERESTS IN SECURITIES

  As at 31 December 2020, the interests and short positions of each of the directors, supervisors and chief executives of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning as defined in Part XV of the SFO), which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required to be recorded in the register required to be kept as referred to in Section 352 of the SFO (including the interests and short positions which they were taken or deemed to have under such provisions of the SFO) or were otherwise required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code as set out in Appendix 10 to the Hong Kong Listing Rules, were as follows:

Section 6cReport of the Board

Approximate

Approximate	Approximate	percentage of
Name of director/	Capacity/	Number of	percentage of	percentage of	total number
supervisor	nature of interest	shares	A Shares (%)	H Shares (%)	of shares (%)
Mr. Wei Jian Jun	Interests in controlled	5,115,000,000 (L)	84.18	-	55.74
companies	(A Shares)
Mr. Wei Jian Jun	Interests in controlled	37,998,500 (L)	-	1.23	0.41
companies	(H Shares)
Total	5,152,998,500 (L)	-	-	56.15
(A Shares and
H Shares)

Note: (L) denotes a long position in shares of the Company

XIV. INTERESTS IN CONTROLLED COMPANIES

As at 31 December 2020, Baoding Innovation Great Wall Asset Management Company Limited (ڭ֛ ௴อڗ۬༟ପ၍ଣϞࠢʮ̡) was controlled by Baoding Great Wall Holdings Company Limited (ڭ֛̹ ڗ۬છٰණྠϞࠢʮ̡) which was in turn controlled by Mr. Wei Jian Jun. Accordingly, pursuant to the SFO, Mr. Wei Jian Jun was deemed to be interested in the 5,115,000,000 A Shares held by Baoding Innovation Great Wall Asset Management Company Limited (ڭ֛௴อڗ۬༟ପ၍ଣϞࠢʮ̡) and the 37,998,500 H Shares held by Baoding Great Wall Holdings Company Limited (ڭ֛̹ڗ۬છٰණྠϞࠢ ʮ̡).

Save as disclosed above, so far as the directors of the Company are aware, as at 31 December 2020, none of the directors, supervisors or chief executives of the Company had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interests or short positions which they were taken or deemed to have under such provisions of the SFO), or which were required to be recorded in the register required to be kept as referred to in Section 352 of the SFO or were otherwise required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code. For this purpose, the relevant provisions of the SFO shall be construed as if they were applicable to the supervisors.

Section 6cReport of the Board

• XV. SHAREHOLDING STRUCTURE AND NUMBER OF SHAREHOLDERS

  Please refer to Section 9 "Changes in Ordinary Shares and Shareholders" of this report.

• XVI. SHARES HELD BY SUBSTANTIAL SHAREHOLDERS (SFO REQUIREMENTS)

  Please refer to Section 9 "Changes in Ordinary Shares and Shareholders" of this report.

• XVII. PUBLIC FLOAT

  Based on the public information available to the Company prior to the publication of this report and to the knowledge of the directors of the Company, the directors of the Company confirmed as at 31 December 2020, there was sufficient public float with approximately 43.84% of the issued share capital of the Company held by the public.

• XVIII. CONNECTED TRANSACTIONS

  During the Year, the Group has entered into connected transactions and continuing connected transactions with its connected persons. The independent non-executive directors have reviewed the relevant continuing connected transactions and confirmed that such continuing connected transactions have been entered into:

  • 1. in the ordinary and usual course of business of the Group;

  • 2. either on normal commercial terms or, if there are no sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to the Group than terms available to or from (as appropriate) independent third parties;

  • 3. in accordance with the relevant agreements governing them; and

  • 4. on terms that are fair and reasonable and in the interests of the shareholders of the Company as a whole.

  The auditor of the Company performed work in accordance with the regulations in the Hong Kong Standard on Assurance Engagements 3000 (Revised) - Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and with reference to the Practice Note 740 - Auditor's Letter on Continuing Connected Transactions under the Hong Kong Listing Rules issued by the Hong Kong Institute of Certified Public Accountants, and issued a letter dated 15 March 2021 to the Board of the Company to confirm the relevant procedures performed by the auditor of the Company on continuing connected transactions. The conclusion of the Company's auditor in the letter is summarized as follows:

  a. to its knowledge and belief, all of the disclosed continuing connected transactions have been approved by the Board of the Company.

Section 6cReport of the Board

• b. to its knowledge and belief, the transactions of the Group for provision of goods or services are in compliance with the Company's pricing policies in all material aspects.

• c. to its knowledge and belief, the transactions are in compliance with the terms of agreements of relevant transactions in all material aspects.

• d. to its knowledge and belief, none of the disclosed continuing connected transactions set out below exceeds the relevant annual caps disclosed in the previously published announcements of the Company and set out below.

For details of the connected transactions, please refer to item XIV "Material Related Party Transactions" of Section 8 of this report.

The related party transactions and the connected transactions conducted by the Group during the Year have been complied with the reporting, annual review, announcement and independent shareholders' approval as required under Chapter 14A of the Hong Kong Listing Rules.

Section 6cReport of the Board

• XIX. REMUNERATION POLICIES

  The Remuneration Committee is responsible for reviewing the remuneration policies for directors and senior management of the Group and determining the remuneration packages for directors and senior management.

  Directors

  The Company determines the remuneration of the directors with regard to certain factors, including their business competitiveness in their respective professions, their duties and the performance of the Company. The remuneration package includes basic salaries, bonuses, incentives and benefits in kind.

  Non-executive directors

  The remuneration of each of the non-executive directors (including the independent non-executive directors) is no less than RMB40,000 per annum.

  Employees

  Employees are remunerated on the basis of their performance, experience and prevailing industry practices. The Group's remuneration policies and packages are reviewed on a regular basis to ensure the competitiveness of the remuneration in recruiting, retaining and motivating employees. Bonuses and incentives may also be awarded to employees based on their individual performance as incentives and rewards.

• XX. UNCLAIMED DIVIDENDS

  As at 31 December 2020, the Company's unclaimed dividends are shown below:

  Unclaimed dividends	Unclaimed amount
  Dividends	(number of cases)	(in HK$)
  2014 final dividends	53	103,754.18
  2015 interim dividends	52	28,830.09
  2015 final dividends	54	68,691.41
  2016 final dividends	54	120,117.41
  2017 final dividends	59	74,523.09
  2018 final dividends	65	132,394.62
  2019 final dividends	64	130,281.82

  Save for the provisions under the Articles in relation to handling unclaimed dividends, the Company did not enter into any agreements with any shareholders for waiving or agreeing to waive the dividends of the Company.

Section 6cReport of the Board

XXI. MATERIAL LITIGATIONS

During the Year, the Company was not involved in any material litigation.

• XXII. PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

  Save as disclosed in this report in relation to the repurchase and cancellation of certain restricted Shares under the initial grant of the 2020 Share Option Incentive Scheme, there was no purchase, sale or redemption of the Company's listed securities by the Company or any of its subsidiaries during the Year.

• XXIII. CORPORATE GOVERNANCE

  To the knowledge of the Board, the Company has complied with all the code provisions in the Corporate Governance Code as set out in Appendix 14 to the Hong Kong Listing Rules during the Year. The Corporate Governance Report sets out a summary of the corporate governance practices of the Company and, if any, the explanation of deviation from the Corporate Governance Code set out in the Hong Kong Listing Rules.

• XXIV. ENVIRONMENT AND SOCIAL RESPONSIBILITIES

  For details of environmental policy and social responsibility during the Year, please refer to the Corporate Social Responsibility Report for 2019 of Great Wall Motor Company Limited ( ڗ۬ӛԓٰ΅ Ϟࠢʮ̡2020 ϋܓٟึப΂జѓ') published on the websites of the Shanghai Stock Exchange (www.sse. com.cn) and the Hong Kong Stock Exchange (www.hkexnews.hk).

• XXV. DESCRIPTION OF OTHER MATTERS

  During the Reporting Period, the Company has complied with relevant laws and regulations that have significant impacts on the Company.

XXVI. AUDIT COMMITTEE

The Company has set up the Audit Committee for the purposes of reviewing and supervising the financial reporting process and internal control of the Group. The Audit Committee comprises three independent non-executive directors and one non-executive director of the Company. At the meeting held on 29 March 2021, the Audit Committee reviewed the 2020 annual report and financial report of the Group and gave their opinions and recommendations to the Board of the Company. The Audit Committee is of the opinion that the 2020 annual report and financial report of the Company comply with the applicable accounting standards and the Company has made appropriate disclosure thereof.

Section 6cReport of the Board

• XXVII. REMUNERATION COMMITTEE

  The Remuneration Committee of the Company comprises two independent non-executive directors and one executive director. The Remuneration Committee is responsible for making recommendations on the remuneration policies in relation to the directors and senior management of the Company, and determining the remuneration packages of executive directors and senior management, including benefits in kind, pensions and compensation payments.

• XXVIII. NOMINATION COMMITTEE

  The Nomination Committee of the Company comprises two independent non-executive directors and one executive director. The Nomination Committee is responsible for making recommendations to the Board regarding its size and composition based on business activities, asset scale and shareholding structure of the Company and making recommendations to the Board about the standards and procedures for selecting directors and management members.

• XXIX. STRATEGY COMMITTEE

  The Strategy Committee of the Company comprises two executive directors, one non-executive director and two independent non-executive directors. The Strategy Committee makes recommendations to the management from time to time in accordance with the prevailing market environment and changes in policies and is responsible for researching and making recommendations on the Company's long-term development strategies and material investment decisions.

• XXX. COMPLIANCE WITH THE MODEL CODE

  The Company has adopted the Model Code as its own code of conduct regarding securities transactions by all directors. Having made specific enquiry to the directors and based on the information available, the Board is of the opinion that all directors have complied with the provisions under the Model Code during the Year.

• XXXI. AUDITOR

  Deloitte Touche Tohmatsu Certified Public Accountants LLP was the Company's external auditor for the year ended 31 December 2020. A resolution for the re-appointment of Deloitte Touche Tohmatsu Certified Public Accountants LLP as the Company's external auditor will be proposed at the annual general meeting. There was no change in the auditor of the Company in any of the preceding three years. For details, please refer to Section 12 "Corporate Governance" of this report.

Section 7cReport of the Supervisory Committee

To all shareholders:

During the year 2020, all members of the Supervisory Committee of the Company adhered strictly to the requirements of the Company Law of the PRC and the Articles, discharged their supervisory duties in accordance with the relevant regulations and, actively as well as cautiously, proceeded with various initiatives to safeguard the interests of the Company and all its shareholders based on the principle of integrity. The Supervisory Committee played an effective role in ensuring the formalised operation and sustainable development of the Company.

I. MEETINGS AND RESOLUTIONS OF THE SUPERVISORY COMMITTEE

Session of meeting

Date of meetingResolution

The 19th meeting of the sixth session of the Supervisory Committee

30 January 2020

Considered and approved the Company's

Resolutions on the 2020 Restricted Share and Share Option Incentive Scheme (Draft) and Its Summary, the Appraisal Measures for Implementation of the 2020 Restricted Share and Share Option Incentive Scheme, and the Management Measures for Long-term Incentive Mechanism

The 20th meeting of the sixth session of the Supervisory Committee

13 March 2020

Considered and approved the Company's

Resolutions on the 2020 Restricted Share and Share Option Incentive Scheme (First Amended Draft) and Its Summary, the Appraisal Measures for Implementation of the 2020 Restricted Share and Share Option Incentive Scheme (Amended), and the Management Measures for Long-term Incentive Mechanism (Amended)

The 21st meeting of the sixth session of the Supervisory Committee

24 March 2020

Considered and approved the Company's

Resolution on Reviewing and Announcement of the List of Participants of the 2020 Restricted Share and Share Option Incentive Scheme

Section 7cReport of the Supervisory Committee

Session of meeting

Date of meetingResolution

The 22nd meeting of the sixth session of the Supervisory Committee

24 April 2020

Considered and approved the Company's

Audited Financial Report for 2019, Report of the Supervisory Committee for 2019, Profit Distribution Proposal for 2019, the Annual Report for 2019 and Its Summary, and Resolutions on Re-appointment of the Accounting Firm, Internal Control Evaluation Report of Great Wall Motor Company Limited for 2019, Corporate Social Responsibility Report of Great Wall Motor Company Limited for 2019, Re-election of Ms. Zong Yi Xiang as an Independent Supervisor of the Seventh Session of the Supervisory Committee, Re-election of Ms. Liu Qian as an Independent Supervisor of the Seventh Session of the Supervisory Committee, Purchase of Wealth Management Products, and First Quarterly Report for 2020

The 23rd meeting of the sixth session of the Supervisory Committee

27 April 2020

Considered and approved the Company's

Resolutions on the Adjustment of the List of Participants and the Number of Restricted Shares and Share Options to be Granted under the 2020 Restricted Share and Share Option Incentive Scheme, and the Grant of Restricted Shares and Share Options to Participants of the 2020 Restricted Share and Share Option Incentive Scheme

The 24th meeting of the sixth session of the Supervisory Committee

15 May 2020

Considered and approved the Company's

Resolution on the Adjustment of the Profit Distribution Proposal for 2019

The 1st meeting of the seventh session of the Supervisory Committee

12 June 2020

Considered and approved the Company's

Resolutions on Ordinary Related Party Transactions with Spotlight Automotive and the Election of the Chairman of the Supervisory Committee

Section 7cReport of the Supervisory Committee

Session of meeting

Date of meetingResolution

The 2nd meeting of the seventh session of the Supervisory Committee

19 June 2020

Considered and approved the Company's

Resolutions on the Equity Transfer and Related Party (Connected) Transactions, Lease Agreement with Chongqing Chuangban and Adjustment of the Proposed Annual Cap for 2020-2021, Adjustment of the Proposed Annual Cap for 2020-2021 for Related Party Transactions for Purchase of Services, Proposed Annual Cap for 2020-2021 for Related Party Transactions for Provision of Services, and Lease Agreement with Chongqing Chuangban and Proposed Annual Cap for 2020-2021 for the Related Party Transactions for Leases

The 3rd meeting of the seventh session of the Supervisory Committee

24 July 2020

Considered and approved the Company's

Resolutions on the Adjustment of the Repurchase Price of Certain Restricted Shares under the First Grant and the Exercise Price of Share Options under the First Grant for the 2020 Restricted Share and Share Option Incentive Scheme, and the Repurchase and Cancellation of Certain Restricted Shares under the First Grant and the Cancellation of Certain Share Options under the First Grant for the 2020 Restricted Share and Share Option Incentive Scheme

The 4th meeting of the seventh session of the Supervisory Committee

28 August 2020

Considered and approved the Company's

Resolutions on Interim Report for 2020 and Its Summary, and the Adjustment of Ordinary Related Party Transactions with Tianjin Binhai Binyin Automotive Finance Company Limited

The 5th meeting of the seventh session of the Supervisory Committee

28 September 2020

Considered and approved the Company's

Resolution on the Capital Increase in Tianjin Great Wall Binyin Automotive Finance Company Limited and Related Party Transactions

The 6th meeting of the seventh session of the Supervisory Committee

23 October 2020

Considered and approved the Company's

Resolutions on Third Quarterly Report for 2020, and Additional Deposits with Tianjin Great Wall Binyin Automotive Finance Company Limited and Related Party Transactions

Section 7cReport of the Supervisory Committee

Session of meeting

Date of meetingResolution

The 7th meeting of the seventh session of the Supervisory Committee

6 November 2020

Considered and approved the Company's

Resolutions on Satisfaction of the Conditions for the Public Issuance of A Share Convertible Corporate Bonds, the Scheme of the Public Issuance of A Share Convertible Corporate Bonds, the Plan of the Public Issuance of A Share Convertible Corporate Bonds, the Project Feasibility Report on the Proceeds from the Public Issuance of A Share Convertible Corporate Bonds, the Report on the Exemption from the Preparation of the Use of Proceeds Previously Raise, Recovery Measures and Undertakings by Relevant Parties in relation to Dilutive Impact on Immediate Returns of the Public Issuance of A Share Convertible Corporate Bonds, Formulation of the Shareholders' Return Plan for the Next Three Years (Year 2020-2022) of the Company, Formulation of Rules for A Share Convertible Corporate Bondholders' Meeting, Amendments on the Administrative Rules for Use of Proceeds from Fund Raisings of Great Wall Motor Company Limited, and Possible Subscription for A Share Convertible Corporate Bonds under the Public Issuance by the Controlling Shareholder of the Company and Directors or General Managers of Certain Material Subsidiaries and Related Party Transactions

Section 7cReport of the Supervisory Committee

II. TASKS OF THE SUPERVISORY COMMITTEE DURING THE REPORTING PERIOD

During the Reporting Period, the members of the Supervisory Committee not only attended the regular Board meetings of the Company in 2020, but also duly supervised and monitored the financial affairs of the Company, operation decisions made by the management, operation of the Company in accordance with the law and the discharge of duties by the directors and the senior management of the Company. The Supervisory Committee is of the opinion that:

• 1. The Company and its subsidiaries were not involved in any violation of the Company Law, the Articles, the relevant accounting standards, and the laws and regulations of the PRC during their operation in 2020. Related party transactions of the Company for disposal of equity interests were fair and reasonable, and did not prejudice the interests of other shareholders and the Company, nor were there any significant deficiencies in the design or execution of the Company's internal control system. The Company's internal control system was sound and effectively executed.

• 2. The directors and senior management of the Company have discharged their duties with commitment, due observance of the law, well-regulated management, innovation, and high regard for all shareholders' interest during 2020 and there was no violation of the Company Law, the Articles, the relevant accounting standards, and the laws and regulations of the PRC.

• 3. The accounting firm issued a standard and unqualified auditor's report. The Company's financial statements reflected a true view of the financial positions of the Group and the Company as at 31 December 2020, and the results of the Group for the year then ended.

• 4. The Company disclosed information strictly in accordance with relevant provisions of the regulatory authorities and its information disclosure system. The information disclosed by the Company was true, accurate and complete. There was no information which should be disclosed but was not disclosed by the Company.

By Order of the Supervisory Committee Chen Biao

Supervisor

Hebei Province, the PRC, 30 March 2021

Section 8cSignificant Events

I. PROFIT DISTRIBUTION PLAN FOR ORDINARY SHARES OR PLAN FOR CAPITALISATION OF CAPITAL RESERVES

• (I) Formulation, implementation or adjustment of cash dividend policy

   Applicable √ Not applicable

  The Resolution on Amendments to the Articles of Great Wall Motor Company Limited ( ᗫ׵ࡌ ҷ<ڗ۬ӛԓٰ΅Ϟࠢʮ̡௝೻>ٙᙄࣩ') was considered and approved at the first extraordinary general meeting of the Company in 2015, in which the provisions on profit distribution policy under the Articles were amended and the cash dividend policy of the Company was specified. For details, please refer to Article 189 of the revised Articles, which are available on the websites of Shanghai Stock Exchange (www.sse.com.cn), Hong Kong Stock Exchange (www.hkexnews.hk) and the Company (www.gwm.com.cn).

  During the Reporting Period, the Resolution on the Profit Distribution Proposal for the year 2019 ( ᗫ׵2019ϋܓлᆗʱৣ˙ࣩٙᙄࣩ') was considered and approved at the 2019 annual general meeting of the Company. Based on the total share capital of 9,176,572,500 shares on the equity registration date when the Company implements profit distribution, a final cash dividend of RMB0.25 for every share (tax inclusive) would be paid, amounting to cash dividends of RMB2,294,143,125.00 in total. On 22 June 2020, the Board of the Company published the Announcement on the Implementation of the Profit Distribution Plan for A Shares of Great Wall Motor Company Limited for 2019 ( ڗ۬ӛԓٰ΅Ϟࠢʮ̡2019 ϋܓ A ٰлᆗʱৣྼ݄ʮ ѓ') on China Securities Journal, Shanghai Securities News and the website of the Shanghai Stock Exchange. The announcement was also published on the website of the Hong Kong Stock Exchange in the form of overseas regulatory announcement. The distribution of dividend to A Shareholders was completed on 30 June 2020. Meanwhile, the dividend for H Shareholders of the Company was distributed in accordance with the relevant requirements of the Hong Kong Stock Exchange.

• (II) Plan or proposal for profit distribution or capitalisation of capital reserves of the Company in ordinary shares in the last three years (including the Reporting Period)

Unit: RMBcCurrency: RMB

Net profits attributableYear of Distributed

Number of bonus shares for every 10 shares

Dividend for every 10 shares

(share)

(RMB) (Tax inclusive)Number of scrip shares for every 10 shares

Total amount of cash dividend

(share)

(Tax inclusive)to ordinary shareholders of the Company in the consolidated financial statements for the year during which dividend was distributionRatio of the net profits attributable to ordinary shareholders of the Company in the consolidated financial statements (%)

2020 2019 2018

0 0 0

2.8 2.5 2.5

0 2,569,266,924.00 5,362,490,194.32 47.91

0 2,294,143,125.00 4,496,874,893.92 51.02

0 2,646,908,010.00 5,207,313,967.76 50.83

Section 8cSigni cant Events

Note: On 24 February 2021, the Company convened the second extraordinary general meeting in 2021, at which the Resolution on the Profit Distribution Proposal for the First Three Quarters of 2020 ( ᗫ׵2020ϋۃɧ֙ܓлᆗʱৣ˙ࣩ') was considered and approved. Based on the total share capital of 9,175,953,300 shares on the equity registration date when the Company implements profit distribution, a cash dividend of RMB0.28 (tax inclusive) per share would be paid, amounting to cash dividends of RMB2,569,266,924.00 in total. The distribution of dividend to A Shareholders was completed on 9 March 2021. Meanwhile, the dividend for H Shareholders of the Company was distributed in accordance with the relevant requirements of the Hong Kong Stock Exchange.

(III) Cash dividend by share repurchase offer in cash

 Applicable √ Not applicable

(IV) If the Parent recorded profits distributable to the ordinary shareholders during the

Reporting Period, but has not proposed any plans or proposals for distribution of cash dividend for the ordinary shares, it shall disclose the reasons for non-distribution as well as the use of and future plans for the undistributed profits in detail

 Applicable √ Not applicable

(V) Other matters

According to the Enterprise Income Tax Law of the People's Republic of China ( ʕശɛ͏΍ձ ਷Άุה੻೼ج') and the Rules of the Implementation of the Enterprise Income Tax Law of the People's Republic of China ( ʕശɛ͏΍ձ਷Άุה੻೼جྼ݄ૢԷ') (collectively, "Enterprise Income Tax Law"), which took effect on 1 January 2008 and the Notice of the State Administration of Taxation on Issues Relevant to the Withholding of Enterprise Income Tax on Dividend Paid by PRC Enterprises to Offshore Non-resident Enterprise Holders of H Shares (Guo Shui Han [2008] No. 897) ( ਷࢕೼ਕᐼ҅ᗫ׵ʕ਷֢͏ΆุΣྤ̮Hٰڢ֢͏Άٰุ؇ݼ೯ٰࢹ˾ϔ˾ᖮΆุה੻೼ Ϟᗫਪᕚٙஷٝ'(਷೼Ռ[2008]897 ໮ )) promulgated on 6 November 2008 by State Administration of Taxation, when the Company distributes the final dividends to non-resident enterprise Shareholders whose names appear on the H Share register of members of the Company, the Company is required to withhold and pay on behalf of such Shareholders an enterprise income tax at the rate of 10%. Any Shares registered in the name of a non-individual Shareholder, including Hong Kong Securities Clearing Company Nominees Limited, other nominees or trustees, or other organisations and groups, are deemed as Shares held by non-resident enterprise Shareholders. As such, the dividends that he or she entitled to are subject to the enterprise income tax.

Section 8cSigni cant Events

According to the relevant requirements of the Notice on the Tax Policies Concerning the Pilot Program of the Shanghai-Hong Kong Stock Connect (Cai Shui [2014] No. 81) ( ᗫ׵လಥٰୃ ̹ఙʹ׸ʝᑌʝஷዚՓ༊ᓃϞᗫ೼ϗ݁ഄٙஷٝ€ৌ೼[2014]81 ໮ ) ') and the Notice on the Tax Policies Concerning the Pilot Program of the Shenzhen-Hong Kong Stock Connect (Cai Shui [2016] No. 127) ( ᗫ׵ଉಥٰୃ̹ఙʹ׸ʝᑌʝஷዚՓ༊ᓃϞᗫ೼ϗ݁ഄٙஷٝ€ৌ೼[2016]127 ໮ )') jointly published by the Ministry of Finance, State Administration of Taxation and China Securities Regulatory Commission of the PRC, the Company shall withhold an individual income tax at the rate of 20% on dividends derived from investing in H Shares listed on the Hong Kong Stock Exchange through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect by mainland individual investors. As to the withholding tax having been paid abroad, an individual investor may file an application for tax credit with the competent tax authority of China Securities Depository and Clearing Co., Ltd. with an effective credit document. Reference shall be made to individual income tax regulations for dividends received by mainland securities investment funds from investing in shares listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. Dividends received by mainland enterprises investors from shares acquired from the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect shall be included in their total income and subject to enterprise income tax. The Company shall not withhold income tax on dividends to mainland enterprise investors who shall report and pay their income tax on their own.

II.

PERFORMANCE OF UNDERTAKINGS

(I)Undertakings of the de facto controller, shareholders, related parties, acquiring parties of the Company and the Company and other parties involved during the Reporting Period or subsisting to the Reporting Period

√ Applicable

 Not applicable

Background of undertakingsDate and duration ofAny time frame forType of undertakingsUndertaking partyDescription of undertakingsperformance performance in a timelyundertakings (yes/no)Strict and timely

(yes/no)

Reasons for	Description
failure of	of next
performance	step plan (if
(if undertakings	undertakings

cannot be performed in a timely manner)

cannot be performedmanner)

Undertakings relating to the initial public offeringResolving related party transaction

Great Wall Motor Company Limited

Since 1 January 2012, Great Wall Motor Company Limited (ڗ۬ӛԓٰ΅Ϟࠢʮ̡) has ceased to enter into any transactions relating to automotive parts and components with Hebei Baoding Tai Hang Group Company Limited (ئ̏ڭ֛˄БණྠϞࠢ ப΂ʮ̡) and Baoding Tai Hang Pump Manufacturing Company Limited (ڭ֛̹˄БႡݿϞࠢʮ̡).

From January 2012, permanentNoYes

-

-

Section 8cSigni cant Events

Background of undertakingsDate and duration ofAny time frame forType of undertakingsUndertaking partyDescription of undertakingsperformance performance in a timelyundertakings (yes/no)Reasons for failure of performanceDescription of next step plan (if

(if undertakings undertakingsStrict and timely

(yes/no)cannot be performedmanner)cannot be performed in a timely manner)

Undertakings relating to the initial public offeringResolving business competition of the same industryBaoding Innovation Great Wall Asset Management Company Limited

(ڭ֛௴อڗ۬

༟ପ၍ଣϞࠢʮ̡)

1. Baoding Innovation Great Wall Asset From 10

Management Company Limited (ڭ ֛௴อڗ۬༟ପ၍ଣϞࠢʮ̡) is not directly or indirectly engaged in any Competing Business.

• 2. As long as Baoding Innovation Great Wall Asset Management Company Limited (ڭ֛௴อڗ۬༟ପ၍ଣϞࠢ ʮ̡) remains a related party that has control over Great Wall Motor Company Limited (ڗ۬ӛԓٰ΅ Ϟࠢʮ̡), its directly or indirectly controlled subsidiaries would not in any way, directly or indirectly, engage in any existing or potential Competing Business.

• 3. Subject to the same conditions, Great Wall Motor Company Limited (ڗ۬ ӛԓٰ΅Ϟࠢʮ̡) shall have the right of first refusal on the investment or other business opportunities relating to Competing Businesses that Baoding Innovation Great Wall Asset Management Company Limited (ڭ ֛௴อڗ۬༟ପ၍ଣϞࠢʮ̡) will pursue or may get in the future.

NoYes

-

-

December 2010, permanent

Section 8cSigni cant Events

Background of undertakingsDate and duration ofAny time frame forType of undertakingsUndertaking partyDescription of undertakingsperformance performance in a timelyundertakings (yes/no)Strict and timely

(yes/no)

Reasons for	Description
failure of	of next
performance	step plan (if
(if undertakings	undertakings

cannot be performed in a timely manner)

cannot be performedmanner)

Undertakings relating to the initial public offeringResolving business competition of the same industryWei Jian Jun

1. The subsidiaries directly or indirectly From 10 controlled by Mr. Wei Jian Jun are not December

directly or indirectly engaged in any Competing Business.

• 2. As long as Mr. Wei Jian Jun remains a related party who has control over Great Wall Motor Company Limited (ڗ۬ӛԓٰ΅Ϟࠢʮ̡), the subsidiaries directly or indirectly controlled by him would not in any way, directly or indirectly, engage in any existing or potential Competing Business.

• 3. Subject to the same conditions, Great Wall Motor Company Limited (ڗ۬ӛ ԓٰ΅Ϟࠢʮ̡) shall have the right of first refusal on the investment or other business opportunities relating to the Competing Businesses that the subsidiaries directly or indirectly controlled by Mr. Wei Jian Jun will pursue or may get in the future.

  2010, permanent

  Undertakings relating to re-financing

  OthersBaoding Innovation Great Wall Asset Management Company Limited (ڭ֛௴อڗ۬༟ ପ၍ଣϞࠢʮ̡), Wei Jian Jun

• 1. The undertaking party undertakes to From 6

exercise its rights as a shareholder in accordance with the relevant laws,November 2020,regulations and the relevant provisions permanent of the Articles of Association of

Great Wall Motor Company Limited, not to interfere with the Company's operation or management activities beyond its authority, and not to infringe on the Company's interests.

NoYes

-

-

NoYes

-

-

Section 8cSigni cant Events

Background of undertakingsDate and duration ofAny time frame forType of undertakingsUndertaking partyDescription of undertakings

2. The undertaking party undertakes to effectively perform relevant compensation recovery measures developed by Great Wall Motor and any undertaking made by the undertaking party thereon in relation to the compensation recovery measures. If the undertaking party violates such undertakings and consequently causes any loss to Great Wall Motor or any investor, the undertaking party is willing to assume relevant legal liabilities to Great Wall Motor or the investor.

3.

If China Securities Regulatory Commission ("CSRC") puts forth new regulatory requirements on compensation recovery measures or the relevant undertakings in the period from the date of these undertakings to the completion of the public issuance of A Share convertible corporate bonds, and the undertakings above cannot meet such new regulatory requirements of CSRC, the undertaking party undertakes to make additional undertakings in accordance with the latest requirements of CSRC.

performance performance in a timelyundertakings (yes/no)Reasons for failure of performanceDescription of next step plan (if

(if undertakings undertakingsStrict and timely

(yes/no)cannot be performedmanner)cannot be performed in a timely manner)

Section 8cSigni cant Events

Reasons for	Description
failure of	of next
performance	step plan (if
(if undertakings	undertakings

Background of undertakings

Other

Type of undertakings

All Directors and senior management

Undertaking party

1.

Any time	Strict and	cannot be	cannot be
Date and	frame for	timely	performed	performed
Description of	duration of	performance	performance	in a timely	in a timely
undertakings	undertakings	(yes/no)	(yes/no)	manner)	manner)
From 6	No	Yes	-	-
November
2020,
permanent

I undertake to perform my duties as a Director and/or a senior management of the Company and uphold the legitimate rights and interests of the Company and all Shareholders of the Company faithfully and diligently.

2. I undertake not to convey any benefits to other entities or individuals for free or under unfair terms or otherwise jeopardise the interests of the Company.

• 3. I undertake to limit my spending when performing my duties as a Director and/or a senior management.

• 4. I undertake not to use the assets of the Company in making investments or expenditures other than in relation to the performance of my duties.

• 5. Within my duties and scope of my lawful authorisation, I undertake to fully procure that the remuneration system formulated by the Board or the remuneration and assessment committee under the Board will correspond to the implementation of the recovery measures of the Company, and I will vote in favour of the relevant proposals considered by the Board and at the Shareholders' General Meeting (if voting rights are applicable).

Section 8cSigni cant Events

Background of undertakingsDate and duration ofAny time frame forType of undertakingsUndertaking partyDescription of undertakings

6. If the Company adopts any share incentive scheme in the future, within my duties and scope of my lawful authorisation, I undertake to fully procure that the conditions for the exercise of the right of the share incentive scheme will correspond to the implementation of the recovery measures of the Company, and I will vote in favour of the relevant proposals considered by the Board and at the Shareholders' General Meetings (if voting rights are applicable).

7.

From the date of this undertaking letter to the completion of implementation of the Public Issuance of Convertible Corporate Bonds of the Company, if the CSRC promulgates other new regulatory provisions on the recovery measures and the relevant undertakings, and the above undertakings cannot satisfy such new regulatory provisions as promulgated by the CSRC, I undertake to issue supplementary undertakings then according to the latest stipulations of the CSRC.

performance performance in a timelyundertakings (yes/no)Reasons for failure of performanceDescription of next step plan (if

(if undertakings undertakingsStrict and timely

(yes/no)cannot be performedmanner)cannot be performed in a timely manner)

Section 8cSigni cant Events

Reasons for	Description
failure of	of next
performance	step plan (if
(if undertakings	undertakings

Any time	Strict and	cannot be	cannot be
Date and	frame for	timely	performed	performed
Background of	Type of	Undertaking	Description of	duration of	performance	performance	in a timely	in a timely
undertakings	undertakings	party	undertakings	undertakings	(yes/no)	(yes/no)	manner)	manner)

8. I undertake to fully execute the relevant recovery measures formulated by the Company and each undertaking I made in relation to recovery measures. If I breach such undertakings and cause any loss to the Company or investors, I am willing to bear the relevant legal responsibility to the Company or investors in accordance with the laws.

(II) Explanation of the Company for whether the assets or projects on which a profit forecast is subsisting or subsisted during the Reporting Period have reached the original profit forecast and the reasons therefor

 Yes

 No

√ Not applicable

(III) Fulfilment of performance undertakings and their impact on goodwill impairment testing

 Applicable √ Not applicable

III. FUND USED BY OTHER PARTIES AND PROGRESS OF FUND REPAYMENT DURING THE REPORTING PERIOD

 Applicable √ Not applicable

IV. EXPLANATION OF THE COMPANY FOR "NON-STANDARD AUDITOR'S REPORT" ISSUED BY THE ACCOUNTING FIRM

 Applicable √ Not applicable

Section 8cSigni cant Events

V. EXPLANATION OF THE COMPANY FOR THE REASONS FOR AND EFFECTS OF CHANGES

IN THE ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES OR REMEDIES FOR MAJOR ACCOUNTING ERRORS

(I) Explanation of the Company for the reasons for and effects of changes in the accounting policies and accounting estimates

√ Applicable

 Not applicablePlease refer to "30. Changes in significant accounting policies" of "(III) Significant Accounting Policies and Accounting Estimates" in the Auditor's report.

• (II) Explanation of the Company for the reasons for and effects of remedies for major accounting errors

   Applicable

  √ Not applicable

• (III) Communication with the former accounting firm

   Applicable

  √ Not applicable

• (IV) Other explanations

 Applicable

√ Not applicable

VI.

APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRM

Name of local accounting firm

Remuneration for local accounting firm Audit years of local accounting firm

Current appointment

Unit: RMBcCurrency: RMB

Deloitte Touche Tohmatsu Certified Public Accountants LLP 2,358,490.57 11 years

Name	Remuneration
Accounting firm for internal	Deloitte Touche Tohmatsu	330,188.68
control audit	Certified Public Accountants LLP