Sinotrans : Interim Report 2020

September 10, 2020 at 05:25 am EDT

Stock Code: 0598HK 601598SH

CUSTOMERS' SUCCESS

OUR ACHIEVEMENT

2020INTERIM REPORT

INTERIM REPORT 2020

Important Notice

1. The Board and the Supervisory Committee of the Company and the Directors, Supervisors and members of the Senior Management warrant the truthfulness, accuracy and completeness of the contents in this Interim Report and confirm that there are no misrepresentations or misleading statements contained in or material omissions from this Interim Report, and accept several and joint legal responsibilities.

2. Absent Directors
	Position of the	Name of the	Reason for the
	absent Director	absent Director	absence of the Director	Name of proxy

	Non-executive Director	Su Jian	Absent due to other	Li Guanpeng
			business engagement

3. The Interim Report is unaudited.

4. The Company's legal representative, Li Guanpeng; Chief Financial Officer, Wang Jiuyun; and the person in charge of the Financial Department ("person in charge of accounting"), Mai Lina, hereby make the statement that they warrant the financial statements contained in this Interim Report are true, accurate and complete.

5. Proposal for profit distribution or proposal for conversion of common reserve fund into share capital during the Reporting Period considered by the Board

6. Risk disclaimer of forward-looking statements

3Applicable Not applicable

Forward-looking statements including future plans and development strategies in this Report do not constitute substantive commitments of the Company to investors. Investors should be aware of the investment risks.

7. Whether the controlling shareholder or its related parties has misappropriated the Company's funds for purposes other than for business

8. Whether the Company has provided external guarantees in violation of any prescribed decision-making procedures

9. Significant risk alert

The Company has described the potential risks in detail in this Report. Please refer to "Chapter 4 Management Discussion and Analysis of Business Performance (Report of the Board) - III. OTHER DISCLOSURES - (III) Potential Risks" in this Report.

10. Others

3Applicable Not applicable

The Company's 2020 interim financial report has been prepared in accordance with Accounting Standards for Business Enterprises published by the Ministry of Finance of the People's Republic of China and related provisions. Unless otherwise specified, the reporting currency in this Report is Renminbi ("RMB").

Contents contained in this Report are prepared in compliance with all disclosure requirements of the SSE Listing Rules and SEHK Listing Rules. The Report is published in both Chinese and English versions in Mainland China and Hong Kong at the same time. Should there be any discrepancies between the Chinese and English versions of this Report, the Chinese version shall prevail.

Corporate Mission

Creating a logistics ecology system around the world

to successfully promote industrial progress

Corporate Vision

Becoming a world-class intelligent logistics platform enterprise

CONTENTS

Highlights of the First Half of 2020

Chapter 1	Definitions
Chapter 2	General Information and Key Financial Indicators
Chapter 3	Business Overview
Chapter 4	Management Discussion and Analysis of Business
	Performance (Report of the Board)
Chapter 5	Significant Matters
Chapter 6	Movement of Ordinary Shares and
	Particulars of Shareholders
Chapter 7	Particulars of Preferred Shares
Chapter 8	Directors, Supervisors, and Senior Management
Chapter 9	Particulars of Corporate Bonds
Chapter 10	Financial Report
Chapter 11	Documents Available for Check

336

4 SINOTRANS LIMITED

Highlights of the First Half of 2020

Revenue (RMB)

39.69billion

KLG Group	Revenue		Segment proﬁt from air freight forwarding
	RMB 678 million		130%
	RMB 74+ million
	Proﬁt generated from operation


The volume of China Europe Railway Express		Revenue from Sinotrans E-LCL
	38%	23%

E-commerce business Revenue

Segment Proﬁt

	Percentage of the revenue contribution from
68%	core direct customers
35%
177%

INTERIM REPORT 2020

Chapter 1

Definitions

In this Report, unless the context otherwise indicates, the following words have the following meanings:

A Share(s)	the Domestic Share(s) of the Company with nominal value of
	RMB1.00 each, which are listed on the SSE and traded in RMB
Articles of Association	the Articles of Association of Sinotrans Limited
Board	the Board of Directors of the Company
CG Code	code provisions of Corporate Governance Code as set out in
	Appendix 14 to the SEHK Listing Rules
China Merchants	China Merchants Group Limited (招商局集團有限公司), a wholly
	state-owned enterprise established under the laws of the PRC
	under direct control of the State-owned Assets Supervision
	and Administration Commission of the State Council, the actual
	controller of the Company, which holds approximately 57.61% of
	the issued share capital of the Company at the date of this Report
China Merchants Group or CMG	China Merchants and its subsidiaries
Companies Ordinance	the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)
Company or Sinotrans	Sinotrans Limited (中國外運股份有限公司), a joint stock limited
	company incorporated in the PRC with limited liability, whose H
	Shares are listed on the SEHK and A Shares are listed on the SSE
Company Law	the Company Law of the People's Republic of China
CSRC	China Securities Regulatory Commission
Director(s)/Supervisor(s)	Director(s)/Supervisor(s) of the Company
Domestic Share(s)	shares issued by the Company under the laws of the PRC, the par
	value of which is denominated in RMB, and which are subscribed in
	RMB
Finance Company	China Merchants Group Finance Co., Ltd. (招商局集團財務有限公
	司), a company owned as to 51% by China Merchants and 49% by
	Sinotrans & CSC
Group	Sinotrans Limited and its subsidiaries
HK$	Hong Kong dollars, the lawful currency of Hong Kong Special
	Administrative Region of the PRC

6 SINOTRANS LIMITED

Chapter 1

Definitions

H Share(s)	overseas listed foreign invested Share(s) of RMB1.00 each in the
	issued share capital of the Company, which are listed on the Hong
	Kong Stock Exchange and traded in HK$
Hong Kong	Hong Kong Special Administrative Region of the People's Republic
	of China
Hong Kong Stock Exchange/SEHK	The Stock Exchange of Hong Kong Limited
KLG Group	the seven European logistics companies of KLG Europe Holding
	B.V. acquired by the Company, which were wholly-owned
	subsidiaries of the Company as at the date of this Report
Listing Rules in Listing Places	the SEHK Listing Rules and SSE Listing Rules
Model Code	the Model Code for Securities Transactions by Directors of Listed
	Issuers contained in Appendix 10 to the SEHK Listing Rules
PRC	the People's Republic of China
Reporting Period	the period from 1 January 2020 to 30 June 2020
RMB	Renminbi, the lawful currency of the PRC
SASAC	the State-owned Assets Supervision and Administration Commission
	of the State Council of the PRC
SEHK Listing Rules	Rules Governing the Listing of Securities on The Stock Exchange of
	Hong Kong Limited
Senior Management	the Company's senior management as defined by the Articles of
	Association
SFO	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)

INTERIM REPORT 2020

Chapter 1

Definitions

Share(s)	H Share(s) and A Share(s)
Shareholder(s)	holder(s) of the Shares
Sinoair	Sinotrans Air Transportation Development Co., Ltd. (中外運空運發展
	股份有限公司), a subsidiary of the Company
Sinotrans & CSC	Sinotrans & CSC Holdings Co., Ltd. (中國外運長航集團有限公
	司), a wholly state-owned enterprise established under the laws of
	the PRC, a wholly owned subsidiary of China Merchants, and the
	controlling shareholder of the Company which collectively holds
	35.99% of the issued share capital of the Company at the date of
	this Report
SSE	Shanghai Stock Exchange
SSE Listing Rules	Listing Rules of Shanghai Stock Exchange
subsidiary(ies)	has the meaning ascribed to it under the SEHK Listing Rules
Supervisory Committee	the Supervisory Committee of the Company

8 SINOTRANS LIMITED

Chapter 2

General Information and Key Financial Indicators

I. COMPANY INFORMATION

Chinese name of the Company	中國外運股份有限公司
Chinese abbreviation of the Company	中國外運
Foreign name of the Company	SINOTRANS LIMITED
Foreign abbreviation of the Company	SINOTRANS
Legal representative of the Company	Li Guanpeng

II. CONTACT PERSONS AND CONTACT METHODS

	Secretary of the Board/
	Company Secretary	Representative of Securities Affairs
Name	Li Shichu	Lu Ronglei
Address	Sinotrans Building Tower B, Building 10,	Sinotrans Building Tower B, Building 10,
	No. 5 Anding Road, Chaoyang District,	No. 5 Anding Road, Chaoyang District,
	Beijing, China	Beijing, China
Tel.	8610 52295721	8610 52295721
Fax	8610 52296519	8610 52296519
Email	ir@sinotrans.com	ir@sinotrans.com

III. BASIC INFORMATION

Initial date of registration of the Company	20 November 2002
Registered address of the Company	Building A, Sinotrans Plaza, A43 Xizhimen
	Beidajie, Haidian District, Beijing, China
Postcode of the registered address of the Company	100082
Office address of the Company	Sinotrans Building Tower B, Building 10, No. 5
	Anding Road, Chaoyang District, Beijing, China
Postcode of office address of the Company	100029
Company website	www.sinotrans.com
Email	ir@sinotrans.com

IV. INFORMATION DISCLOSURE AND PREPARATION LOCATIONS

Name of disclosure newspapers selected	China Securities Journal, Securities Daily
by the Company
Website for publishing the Interim Report	www.sse.com.cn
designated by CSRC
Website for publishing the Interim Report	www.hkex.com.hk
designated by SEHK
Location for Interim Report stock	10/F, Sinotrans Building Tower B, Building 10, No. 5
	Anding Road, Chaoyang District, Beijing, China

INTERIM REPORT 2020

Chapter 2

General Information and Key Financial Indicators

V. OVERVIEW OF COMPANY STOCK

Class of share	Stock exchange	Stock abbreviation	Stock code

H Share	SEHK	Sinotrans	0598
A Share	SSE	Sinotrans	601598

VI. OTHER RELEVANT INFORMATION

3Applicable □Not applicable

Certified public accountants	Name	ShineWing Certified Public Accountants LLP
engaged by the Company	Office address	9/F, Block A, Fuhua Mansion, No. 8 Chaoyangmen
		North Street, Dongcheng District, Beijing
Legal counsel engaged by the	Name	FenXun Partners
Company (As to the PRC	Office address	Suite 3501, China World Office 2, No. 1
Laws)		Jianguomenwai Avenue, Chaoyang District,
		Beijing
Legal counsel engaged by the	Name	Baker & McKenzie LLP
Company (As to Hong Kong	Office address	14/F One Taikoo Place, 979 King's Road, Quarry
Laws)		Bay, Hong Kong
Sponsors to continuously	Name	CITIC Securities Company Limited
perform their supervisory	Office address	21st Floor, CITIC Securities Building, 48
function during the Reporting		Liangmaqiao Road, Chaoyang District, Beijing
Period
Sponsors to continuously	Name	China Merchants Securities Co., Ltd.
perform their supervisory	Office address	26th Floor, CMS China Securities Plaza, No. 111
function during the Reporting		FuHua Rd, Futian District, Shenzhen, Guangdong
Period		Province
Share registrar of A Shares of	Name	China Securities Depository & Clearing Corp. Ltd.
the Company		Shanghai Branch
	Office address	China Insurance Building, 166 East Lujiazui Road,
		Pudong New Area, Shanghai
Share registrar of H Shares of	Name	Computershare Hong Kong Investor Services
the Company		Limited
	Office address	Room 1712-1716, 17th Floor, Hopewell Centre, 183
		Queen's Road East, Wan Chai, Hong Kong
Business address in	Office address	Room F and G, 20/F, MG Tower, No. 133 Hoi Bun
Hong Kong		Road, Kwun Tong, Kowloon, Hong Kong
Principal bank	Name	Bank of China
	Office address	No. 1 Inner Street, Fuxingmen, Xicheng District,
		Beijing, China

10 SINOTRANS LIMITED

Chapter 2

General Information and Key Financial Indicators

VII.KEY ACCOUNTING DATA AND FINANCIAL INDICATORS OF THE COMPANY

(I) Key Accounting Data

		Unit: Yuan	Currency: RMB
			Change as

			compared to the
			corresponding
	Reporting Period	Corresponding	period of last
Key accounting data	(January to June)	period of last year	year (%)

Operating income	39,690,976,521.76	37,720,583,082.13	5.22
Net profits attributable to shareholders of the Company	1,215,123,919.62	1,517,484,875.36	-19.93
Net profits net of non-recurring profit or loss
attributable to shareholders of the Company	1,087,384,727.58	1,308,272,780.14	-16.88
Net cash flows from operating activities	519,158,877.57	-478,672,540.34	N/A

			Change as

	As at		compared to
	the end of the	As at the end	the end of
	Reporting Period	of last year	last year (%)

Net assets attributable to shareholders of the Company	28,812,628,129.28	28,438,616,352.12	1.32
Total assets	64,104,653,048.22	61,886,407,948.66	3.58

(II) Key Financial Indicators

			Change as
			compared to the
			corresponding
	Reporting Period	Corresponding	period of last
Key financial indicators	(January to June)	period of last year	year (%)

Basic earnings per share (RMB per share)	0.1642	0.2115	-22.36
Diluted earnings per share (RMB per share)	0.1642	0.2115	-22.36
Basic earnings per share, net of non-recurring
profit or loss (RMB per share)	0.1469	0.1823	-19.42
Weighted average return on equity (%)	4.18	5.69	decreased by
			1.51 percentage
			points
Net weighted average return on equity, net of non-	3.74	4.91	decreased by
recurring profit or loss (%)			1.17 percentage
			points

Explanations on the key accounting data and financial indicators of the Company

3Applicable □Not applicable

In the first half of 2020, net profit attributable to shareholders of the Company was RMB1,215 million, representing a decrease of 19.93% as compared to the corresponding period of last year, mainly due to a year-on-year decrease in the revenue and net profit of the Company in the first quarter resulting from the decrease in the export related business of the Company as a result of the COVID-19. However, the revenue and net profit of the Company saw recovery in the second quarter. As such, although the net profit of the Company in the first half of 2020 decreased as compared to the corresponding period of last year, but to a notable less extent as compared with the first quarter.

INTERIM REPORT 2020

Chapter 2

General Information and Key Financial Indicators

VIII.ACCOUNTING INFORMATION DIFFERENCES BETWEEN DOMESTIC AND OVERSEAS ACCOUNTING STANDARDS

□Applicable 3Not applicable

IX. NON-RECURRING PROFIT OR LOSS ITEMS AND AMOUNTS

3Applicable □Not applicable

	Unit: Yuan	Currency: RMB
		Note
Non-recurring profit or loss items	Amount	(if applicable)

Gains and losses from disposal of non-current assets	13,942,635.92
Tax returns and abatement that are examined and approved beyond authority, or without
official approval documents or occasional
Government subsidies recognized in current profit or loss, except government subsidies
which are closely related to the Company's normal business operations, which comply
with national policies and can be obtained continuously based on a set of standards
by fixed amount or fixed quantity	148,752,177.33
Capital occupation fees charged from the non-financial enterprises and counted into the
current profits or losses of the Company	2,514,349.03
Gains when the investment cost of acquiring a subsidiary, an associate and a joint
venture is less than the fair value of the identifiable net assets of the invested entity
Gains and losses from exchange of non-monetary assets
Gains and losses from entrusting others to invest or manage assets
Asset impairment provisions due to force majeure factors such as natural disasters
Gains and losses from debt restructuring
Enterprise restructuring costs such as staff settlement expenses and integration costs
Gains and losses that exceeds the fair value in transactions with unfair price
Current net profits or losses of subsidiaries from the merger of enterprise under common
control from the beginning of the period to the date of the merger
Gains and losses arising from contingencies irrelevant to the Company's normal
business operations
Gains and losses from changes in fair value arising from held-for-trading financial assets,
derivative financial assets, held-for-trading financial liabilities, derivative financial
liabilities, and investment income arising from disposal of held-for-trading financial
assets, derivative financial assets, held-for-trading financial liabilities, derivative
financial liabilities and other debt investment other than effective hedging business
related to the Company's normal business operations	550,173.32
Reversal of impairment of accounts receivables and contract assets that had impairment
test separately	374,314.69
Gains and losses from external entrusted loans
Gains and losses from changes in fair value of investment properties subsequently
measured in the fair value model
Impact on the current profits and losses by one-off adjustment according to laws and
regulations related to tax and accounting
Trusteeship fee income from entrusted operations	7,075,471.70
Other non-operating income and expenses other than the above items	-21,467,320.07
Other gains and losses classified to non-recurring profits or losses	26,116,035.10	Additional VAT
		deduction
Impact on non-controlling interests	-8,012,490.91
Impact on income tax	-42,106,154.07
Total	127,739,192.04

X. OTHERS

□Applicable 3Not applicable

12 SINOTRANS LIMITED

Chapter 3

Business Overview

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

(I) Principal Business of the Company and Its Business Model

The Group is a leading integrated logistics service provider and integrator in the PRC. Adhering to the mission of the enterprise of "creating a logistics ecology system connecting the world to successfully promote industrial progress", leveraging on its comprehensive service network, abundant logistics resources, strong professional capabilities of logistics solutions, and leading supply chain logistics model, the Group provides customers with customized logistics solutions and integrated whole supply chain logistics services.

The Group's principal businesses include logistics, forwarding and related business and e-commerce business. As the core business, logistics business focus on high-growth, high- value-addedsub-industries and their upstream and downstream industries, so as to promote high-quality industrial development. As the cornerstone business, forwarding and related business provides support for the development of logistics business. As the innovative business, e-commerce business combine internet and logistics technology to promote the Company's transformation and upgrading to a digital and smart logistics enterprise.

1. Logistics

Based on the different needs of customers, Sinotrans provides tailor-made integrated logistics solutions covering the entire value chain and ensures the smooth implementation of such solutions, mainly including contract logistics, project logistics, chemical logistics, cold chain logistics and other logistics services.

Contract logistics is based on long-term cooperation relationship to provide customers with industry supply chain logistics management services, including procurement logistics, production logistics, sales logistics and reverse logistics, and also provide value-added services such as information services, process optimization, logistics consulting, and supply chain finance. The contract logistics service of the Company has been carried out cluster management according to the target industries and possess leading solution capabilities in multiple industries and fields, such as consumer goods and retail, automobile and accessories, technology & electronics products, medical and health, and buyer consolidation. The Company has established good long-term cooperative relationship with many well-known enterprises at home and abroad.

Project logistics mainly covers the countries and regions along the "Belt and Road" and provides design and implementation of end-to-end one stop logistics solutions to export engineering equipments and materials from the PRC for Chinese international EPC enterprises in industries such as electric power, petrochemical, metallurgical mining, infrastructure and rail vehicles. The services include but are not limited to the provision of logistics solution design, arranging sea, air, and land transportation, warehousing, packaging, customs declaration and inspection, port transit, transportation of large items, import and export policy consultation, etc. The Company has operated many logistics projects in approximately 100 countries and regions around the world and has extensive project experience.

INTERIM REPORT 2020

Chapter 3

Business Overview

Chemical logistics mainly serves refined chemical industry customers, and provides supply chain solutions and logistics services to customers, which mainly include warehousing, transportation and distribution, international freight forwarding and multimodal transportation of hazardous chemicals and ordinary packaged chemicals. The Company has a set of integrated service system for warehousing, transportation (including liquid tank container), freight forwarding, multimodal transport and tax declaration, coordinates in different regional subsidiaries in China, and forms resource network layout of five regions, namely Northeast China, North China, Central China, East China and South China.

Cold chain logistics mainly serves processing, manufacturing and circulation enterprises in food and beverage, import and export trade customers and chain catering enterprises, providing cold chain logistics service of warehousing + line-haul transportation + distribution to customers. Cold chain logistics includes three principal businesses, namely the integration business of cold chain, warehouse and delivery, international supply chain integrated business of imported fresh merchandises, and line-haul transportation of online freight for fresh agricultural products. The Company has established national cold chain logistics network layout, and has strong overall solution service ability of warehousing, line-haul transportation and distribution, whole process cold chain temperature control, tracking, and the ability of design, investment construction and operation management of high standard cold storage.

The vision of the Company's logistics business is to extend the business to value chain consolidation. As the core business of the Company, logistics business will stick to the target of "customized solution, industrialized sale, consolidated service, and unified operation", let the solution lead the whole process, focus on selected target industries, deepen and refine industrial chain, vertically extend the business, and horizontally replicate experience, to forge expertise and advantage of scale in target industries.

2. Forwarding and related business

The forwarding and related business of Sinotrans mainly includes sea freight forwarding, air freight forwarding, railway freight forwarding, shipping agency, storage and terminal services and etc. Sinotrans is the largest freight forwarding company in China and has an extensive service system covering China and radiating the world.

In respect of sea freight forwarding, Sinotrans mainly provides customers with multi- link logistics services related to shipping such as booking space from shipping companies, arranging transportation, container delivery, container loading, storage, port collection and distribution, customs declaration and inspection, distribution and delivery. Sinotrans is one of the world's leading sea freight forwarding service providers, handling more than 10 million TEUs of containers each year, and is capable of providing whole supply chain logistics services from major ports in China to more than 70 major trading countries and regions.

14 SINOTRANS LIMITED

Chapter 3

Business Overview

In respect of air freight forwarding, Sinotrans mainly provides professional air freight forwarding services such as pick-up and dispatch, customs declaration and inspection, warehousing, packaging, booking (including charter and block space services) and handling, trunk air line freight forwarding and trucking transit services. The self-owned overseas air freight forwarding network covers three major continents of Asia, Europe and North America, and the agency network covers nearly 50 countries and regions, and has operated 28 standardized whole chain products. As a leading air freight forwarding company in China, Sinotrans has accumulated extensive industrial experience and entered into strategic cooperation agreements with major domestic and international airlines. With sufficient transportation capacity resources, Sinotrans is able to provide customers with full-process, visualized and standardized whole supply chain air related logistics services.

In terms of railway freight forwarding, Sinotrans is a leading railway freight forwarding service provider in China. It is able to provide customers with railway transportation and information services in bulk cargo, containers and in a variety of ways, including integrated whole supply chain service like domestic railway transportation, international railway transportation (including transit railway transportation) and sea-railmulti-modal transportation throughout China and countries and regions along the "Belt and Road". Since its participation in China Europe Railway Express in 2015, Sinotrans has launched more than 40 routes of China Europe and China-Central Asia in Dongguan, Changsha, Shenyang, Xi'an, Weihai, Xinxiang and other places, dispatched 3,518 trips in total.

In terms of shipping agency, Sinotrans is a leading shipping agency service company in China, with branches in more than 70 ports along the coast of China and the Yangtze River, and representative offices in Hong Kong SAR, Japan, Korea, Singapore, the United Kingdom, Germany and Thailand, providing shipping companies with services such as port arrival and departure, documentation, ship supplies and other ship related services at ports.

In terms of storage and terminal services, Sinotrans provides customers with services such as storage, container consolidating and devanning, cargo loading and unloading, dispatching and distribution, etc. Sinotrans has rich resources of warehouses and container yards, and 8 self-operated river terminals in Guangdong province and Guangxi province, which are important base for the Company to provide high-quality and efficient freight forwarding and integrated logistics services.

Forwarding and related business is the cornerstone of development of logistics segment, it will closely stick to the customers' requirement, emphasize on customer-driven, the valuation creation and model innovation, extend the service chain, mine the value of customers and suppliers, push forward the construction of platform and products, so that to gradually turn the service to whole supply chain logistics.

INTERIM REPORT 2020

Chapter 3

Business Overview

3. E-commerce business

Sinotrans' e-commerce business includes cross-bordere-commerce logistics, logistics e-commerce platform and logistics equipment sharing platform. The cross-border e-commercelogistics business mainly refers to the whole-chain and partial chain professional logistics service provided to e-commerce customers. The products and services cover Europe, America, the Middle East, Japan, Korea, Southeast Asia and other regions. The scope of services includes door-to-door collection, domestic (bonded) warehouse management, import and export customs clearance, international transportation, overseas warehouse management, last mile distribution, etc. Logistics e-commerceplatform refers to the provision of various public services by the Company to the platform customers through the unified online logistics e-commerce platform, namely Y2T, such as information services such as visualization and tracking, handling services, settlement agency services, freight factoring and technical services. Its products cover logistics services such as Sinotrans E-LCL, online freight (trucking transportation), customs service, air freight forwarding, railway and multimodal transport, and has launched a number of whole-chain and sea-rail intermodal transportation products. Logistics equipment sharing platform refers to the Company providing logistics equipment leasing service, including container and mobile fridge container, tracking and monitoring services.

The e-commerce business of the Company aims at turning into platform and building ecology system. We will grasp the two main streams of logistics e-commerce and e-commerce logistics, consolidate internal and external resources by innovation of technologies and business model to finally realize online operation of all principal businesses. Based on fully promoting the online of major business, we will intensify our efforts to develop the cross-bordere-commerce logistics, actively explore logistics e-commerce platform model, strengthen scientific and technological innovation, promote the link with the industrial Internet, and form a "four streams into one" platform ecosystem.

(II) Industry Development

1. Strong government support and guidance highlighting policy advantages of logistics

In 2020, the outbreak of the COVID-19 sparked a chain of events including the restructuring of the supply chain of the manufacturing industry at a global scale. Being a key force for the resumption of work and production as well as the safeguard of state industry security, logistics has received high degree of concerns from all sectors of the society. Against the background, the government has successively issued various documents including the Guidance on Proactive and Orderly Promotion of the Resumption of Work and Production While Conducting Effective Epidemic Prevention and Control (《關於在有效防控疫情的同時積極有序推進復工復產的指導意見》), Notice on the Furtherance of Establishing Pilots of Supply Chain Innovation and Application (《關於進一步做好供應鏈創新與應用試點工作的通知》) and Notice on the Implementation Opinions for Further Reducing the Cost of Logistics 《( 關於進一步降低物流成本實施意見的通知》). Besides, the government also initiated the construction of national logistics hub layout for 2020, supported logistics companies to expedite the layout of hub + channel + networks, accelerated the process of digitalization and encouraged market-oriented merger and acquisition of large-scale logistics companies, as well as promoting the transformation and upgrading of, and quality and efficiency enhancement of the logistics industry, thus providing strong and robust support for the sustainable and health development of the national economy.

16 SINOTRANS LIMITED

Chapter 3

Business Overview

In terms of the cross-bordere-commerce business, in 2020, the State Council decided to establish further 46 cross-bordere-commerce comprehensive experimental zones. Together with the 59 ones previously approved to be established, there will be an aggregate of 105 cross-bordere-commerce comprehensive experimental zones nationwide, contributing to the establishment of the development layout with links running eastward and westward, across land and over sea. In addition, the State Council also launched various measures related to e-commerce such as publishing customs supervisory methods of 9710 for 2B business and 9810 for overseas warehousing, cutting down the import tariff rate for overseas purchases, to promote the development of cross-bordere-commerce trade, which has brought about unprecedented opportunities for the development of cross-bordere-commerce logistics.

2. Market transformation accelerated as the logistics market was still in the recovery phase

From January to June 2020, the national total social logistics value amounted to RMB123.4 trillion, representing a year-on-year decrease of 0.5% in terms of comparable prices, the total social logistics costs amounted to RMB6.5 trillion, representing a year-on-year decrease of 4.0%, and the total revenue recorded in logistics industry amounted to RMB4.6 trillion, representing a year-on-year decrease of 2.7%, with remarkably narrowed drops as compared to that of the first quarter, an evidence that the logistics market was undergoing gradual recovery. Structurally, demand for agricultural products logistics recorded steady growth, demand for industrial logistics experienced slow yet steady growth, while demand for consumption and livelihood related logistics resumed at a faster rate.

In the first half of 2020, amid the severe and sophisticated external environment of foreign trade development for China, the total import and export value achieved RMB14.24 trillion, representing a year-on-year decrease of 3.2%, among which, the export value amounted to RMB7.71 trillion, representing a year-on-year decrease of 3% and the import value amounted to RMB6.53 trillion, representing a year-on-year decrease of 3.3%. On

quarter-on-quarterbasis, the import and export value stabilized in the second quarter with significantly narrowed drop seen as compared with that of the first quarter upon the fluctuation experienced in the first quarter.

The transformation of the logistics market accelerates. On one hand, the fact that order and business volume of logistics companies is undergoing sluggish recovery but is still at a slower pace than that of the corresponding period of previous years, will pose greater pressure of existence on some enterprises. However, leading enterprises with strong competitiveness will maintain advantages in the market and embrace opportunities arising from the long-term strategic layout, which is expected to continuously boost sectoral concentration. On the other hand, the boundary of logistics industry gets increasingly fuzzy. Except for the existing internet enterprises and port and shipping enterprises that step into logistics industry on a crossover basis, upon the outbreak of the pandemic, some enterprises that conduct business flow began to restructure their logistics system under supply chain.

INTERIM REPORT 2020

Chapter 3

Business Overview

3. The China Containerized Freight Index showed an overall downward trend with gradual recovery

From January to May 2020, affected by the COVID-19, China Containerized Freight Index showed an overall downward trend on a month-on-month basis and an upward trend on

year-on-yearbasis. In June 2020, as the impacts of the COVID-19 were mitigated to some extent, all countries had successively taken measures to stimulate recovery of the economy, thus boosting demands for transportation in the market. Meanwhile, shipping companies continued to implement the measures to suspend their shipping service of trade routes with relatively greater shipping capacity, and driven by the generally improved fundamental market, the freight of the majority of trade routes picked up. In June 2020, China Containerized Freight Index averaged at 840.88 points, representing a month-on- month increase of 0.4%, which was a rebound from a successive 4-month decline. In terms of the performance of all trade routes, the freight of Europe Route and Mediterranean Route stabilized and recovered, the market freight of North America Route ascended and that of the Australia & New Zealand Route increased gradually and slightly. From January to June 2020, the container throughput of terminals in China was 120.19 million TEUs, representing a decrease of 5.4% as compared to the corresponding period of last year.

4. Global air cargo transportation volume decreased with new features emerged in the international aviation industry

Under the influences of the policies launched in various countries and the COVID-19, the international air logistics mainly featured with "one decrease, one increase and two changes" in the first half of 2020. The "one decrease" represents the sharp decrease in transportation capacity resources. The global air cargo transportation recorded a year-on-year decrease of more than 18% in the first half of the year, among which the airfreight export volume in the Middle East and Southeast Asia region and Europe recorded the largest decrease of 32% and 22%, respectively. The "one increase" represents the dramatic increase in the price of freight. In the first half of 2020, the average global airfreight rate increased by 48%, with the Asian-Pacific region recording the largest increase of 76%. The "two changes" represents the change in structure of transport capacity from focusing on bellyhold space of passenger aircrafts to cargo aircrafts and passenger-converted cargo aircrafts, and the change in structure of the source of cargo, such as the surge in the quantity of emergency materials and the disruption of other supply chain.

18 SINOTRANS LIMITED

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Business Overview

5. China Europe Railway Express played as the role of a strategic channel and served as an important support for stabilizing international supply chain

During the outbreak of COVID-19, the Country intensively launched various documents and policies to support for protection of the channel and promotion of foreign trade, and guaranteed the channel of China Europe Railway Express. As a key project under the "Belt and Road" Innitiative, China Europe Railway Express experienced growth against unfavourable macro-economic conditions in terms of the number of trips in the first half of 2020, with an accumulated 5,122 trips recorded, representing an increase of 36% as compared to the corresponding period of last year. The number of trips in a single month hit the historical record in consecutive four months. It has accelerated the resumption of work and production. As China Europe Railway Express has become an important channel and hub to support the trade between China and Europe and to clear the transportation of pandemic prevention supplies during international cooperation, its function of stabilizing foreign trade and promoting economic growth was highlighted.

II. EXPLANATION ON MATERIAL CHANGES IN MAJOR ASSETS OF THE COMPANY DURING THE REPORTING PERIOD

3Applicable □Not applicable

Significant changes in major assets of the Company during the Reporting Period are detailed in "(III) Analysis of Assets and Liabilities" of "II. MAJOR BUSINESS CONDITIONS DURING THE REPORTING PERIOD" in "Chapter 4 Management Discussion and Analysis of Business Performance (Report of the Board)" in this Report.

Including: overseas assets RMB20,478,608,586.37 (Unit: Yuan Currency: RMB), accounting for 31.95% of the total assets.

III. ANALYSIS OF CORE COMPETITIVENESS DURING THE REPORTING PERIOD

3Applicable □Not applicable

1. Well-established Service Network and Abundant Logistics Resources

The Group has an extensive and comprehensive domestic service network and overseas service network. The domestic service network covers 32 provinces, autonomous regions, municipalities and Hong Kong SAR in China. The Group has more than 10 million sq.m. of land in China, more than 4 million sq.m. of warehouses and eight river terminals with more than 3,700 meters of coastal line, while leasing approximately 3 million sq.m. of warehouses. The self-owned overseas network has covered 38 countries and regions with 76 business outlets worldwide. The Group has abundant logistics resources such as logistics centers, container freight stations and terminals in coastal ports, key domestic cities and overseas regions. Meanwhile, the Group also implements industry-finance integration and industry synergy with China Merchants Group's financial, trading, industrial park development, shipping and port business segments around the world to provide customers with access to global logistics services.

INTERIM REPORT 2020

Chapter 3

Business Overview

2. Strong Logistics Solution Capabilities

With strong logistics resource integration, coordination and operation capabilities, as well as extensive operating experience in improving the deployment of goods and equipment of all aspects of production, manufacturing and engineering projects of customers, the Company may deliver production resources scattered around the world to the designated locations of customers as scheduled. For actual operations, the Company has experienced industry teams and overseas teams familiar with the import and export policies of various countries. They can integrate and coordinate the logistics resources in various countries, and formulate customized and whole supply chain solutions which include all complicated logistics segments. The Company focuses on key industries, including consumer goods and retail, automobile and accessories, technology & electronics products, medical and health, buyer consolidation, engineering energy, chemical, and cold chain, and provides tailor-made integrated logistics solutions covering the entire value chain to such industry leaders and their upstream and downstream customers, and ensure their smooth implementation. The Company has accumulated extensive industry-oriented service experience and has established industry-leading advantages in full-value chain logistics services.

3. Leading Supply Chain Logistics Service Model

Following the development trend of the industry and in response to the changes in customer demand, Sinotrans keeps innovating its logistics service model by the reorganisation of forwarding and related business products to improve product research, development and design capability. It focuses on six supply chain solution product systems, namely full container load, less than container load, railway multimodal transport, air freight, bulk cargo logistics and comprehensive carrier logistics services and increases the construction of water, land and air fright channels etc. and is capable of providing end-to-endone-stop whole supply chain logistics service to domestic and international enterprises and satisfying various logistics demands of customers in a fast and high-efficient manner.

4. High Brand Awareness, Good Business Reputation and Abundant Customer and Supplier Resources

With 70 years of history and experience, the Group has established good brand awareness in the logistics industry and has been granted many important awards in the industry. As an AAAAA logistics enterprise rated by the China Federation of Logistics & Purchasing, Sinotrans has consecutively won the first prize of the Top 100 Logistics Enterprises in China and the first prize of the Top 100 International Freight Forwarding Logistics in China, and has been awarded as the "Most Competitive (Influential) Logistics Enterprises in China" for many times. As the largest third-party logistics service provider in China, the Company has good reputation and image in terms of both customers and suppliers. On the one hand, Sinotrans has established long-term and stable cooperative relationship with many well-known domestic enterprises and multinational corporations, and has been well recognized by customers. On the other hand, based on its own stable customer resources and strong logistics service capabilities, Sinotrans maintains good and stable partnership with many suppliers, such as internationally renowned shipping companies and airlines.

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Business Overview

5. Innovative Technology to Accelerate Digital Transformation and Take the Lead in Developing Smart Logistics

The Company continues to enhance the coordination of digitalization and innovation, and strengthens the top-level design and the implementation of all scenarios. It has formulated a digital transformation plan, established a smart logistics technology center, established a research and development team of more than 500 people, and established Sinotrans Innovation & Technology Co., Ltd. (中外運創新科技有限公司) as the operating platform for internet-based products. In the meantime, the Company accelerates the application and promotion of logistics technology of ABCDT (Artificial Intelligence, Blockchain, Cloud Computing, Big Data, Internet of Things). Many technologies including intelligent platforms for processing of documents, logistics receiving and delivering goods sorting and identification system, intelligent fridge containers, blockchain-based golden chain logistics platform, intelligent scheduling algorithms, IoT platform plus Heimdallrs (monitoring system) modular equipment have been applied and put into operation.

6. Advocation of Sinotrans Culture of "Customer as Priority, Value as Base, Innovation as Spirit and Hard-working as Foundation"

The long-term development of an enterprise largely depends on its culture and value. The Group has its distinct culture orientation and value proposition. During the 70 years development, the Company always puts customer at the first place and takes value creation as the evaluation criterion, innovation as the spirit for sustainable development and hard-working as the core for success. The Company believes "The customer is priority" and forms a distinct customer culture by returning to the basics of operation, being customer-oriented, taking customer satisfaction as the highest performance indicator and insisting on customer-first service philosophy. The Company takes value as its base and develops a distinct culture of value by setting up multidimensional values, insisting on value-creation as its core principle and taking value-creation as the basic standard for all operating activities. The Company deems innovation and reformation as the spirit and establishes a distinct culture of innovation and reformation, pursuant to which the Company sticks to deem innovation as destiny, reformation as genes, embracing changes as mutual attitudes, and concept of innovation and reformation as the spirit to stimulate the development of the Company. The Company also takes hard-working as the core for success and creates a distinct culture of hard-working by persisting in a pragmatic attitude of unremitting efforts.

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

I. DISCUSSION AND ANALYSIS OF BUSINESS PERFORMANCE

(I) Overall operations during the Reporting Period

In the first half of 2020, the COVID-19 oppressed significant impact on the economic, trade and logistics industry. Since the outbreak of the COVID-19, the Company has actively performed its social responsibility while conducting practical and effective pandemic prevention and control. Under the severe situation that the international and domestic transportation suspended operation, the Company has taken lead in construction of the main logistics network for anti-pandemic materials leveraging its advantages of "five channels and one platform" (五通道、一平臺), thus fulfilling the tasks of transporting pandemic prevention materials at home and abroad. In the first half of 2020, the Company organized 348 international charter flights and 670 international cargo trains in total. Sinotrans transported approximately 4,000 tonnes of pandemic prevention materials through trucking transportation for "Emergency Delivery". Cumulatively, Sinotrans has transported

20.6 thousand tonnes of anti-pandemic materials to more than 70 countries and regions worldwide, thereby firmly performing its commission as a state-owned enterprise that "when the Country is in need, Sinotrans delivers".

Amidst the complex and severe economic situation, Sinotrans has conscientiously implemented the approach of "strategy-oriented development to pursue quality and efficiency for the entire operation" (以戰略引領全局，以質效貫穿始終"). For operating management, the Company integrated and utilized logistics network advantages through construction of "enhancing products and strengthening operation". On the other hand, the Company fortified control of cost and expenses, focused on improvement of quality and efficiency, and achieved excellent effects in various works. In the first half of 2020, the Company achieved operating income of RMB39,691 million, representing an increase of 5.22% as compared to the corresponding period of last year, which was mainly attributable to the Company successfully turned the challenges into opportunities during the Reporting Period, actively promoted the development of major business such as Sinotrans E-LCL,cross-bordere-commerce logistics and international cargo trains, the Company also completed the acquisition of 100% equity interests of KLG Group which contributed revenue of RMB678 million. Net profit attributable to shareholders of the Company was RMB1,215 million, representing a decrease of 19.93% as compared to the corresponding period of last year, mainly due to a year-on-year decrease in the revenue and net profit of the Company in the first quarter resulting from the decrease in the export related business of the Company as a result of the COVID-19. However, the revenue and net profit of the Company saw recovery in the second quarter. As such, the net profit of the Company in the first half of 2020 decreased as compared to the corresponding period of last year, but to a notable less extent as compared with the first quarter.

1. Expediting business transformation and perfecting product system

In the logistics business, we expedited transformation to the value chain integration and concentrated into the refined high value-addedsub-market with high growth potential. Based on the coverage of major industries, in the first half of 2020, we intensified expansion of our business to fashion industry and successfully expanded our logistics business for a number of key customers. We promoted product-based construction to provide major customers with tailor-made "inventory health analysis" product and created digitalized operation management and control solutions. We extended the service value chain focusing on our core customers' demands for cross-border logistics. We bolstered digitalization driver and resource sharing and created a contract warehouse sharing system.

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Management Discussion and Analysis of Business Performance

(Report of the Board)

In the first half of 2020, positive progress was made in the logistics business of key industries. (1) For the consumer goods and retail industry, the loyalty of major customers continued to improve. We successfully renewed agreements with several major customers and further fortified our long-term partnership. (2) For the automobile and spare parts business, we started to engage in car transportation business and won the bid for car transportation business of BMW's certified cars in China. (3) For the technology & electronic industry, we expanded to the subdivided areas and won the bids of projects such as Baidu IDG logistics project. "Smart manufacturing" started to become a new growth driver in the technological and electronic industry. (4) For the medical and health industry, we continuously developed customers such as Sinopharm (中國醫藥) and Beiyi Medicine (北醫醫

藥) and extended our service chain to the upstream and downstream of the medical industry.

(5) For the buyer consolidation business, we expanded to emerging markets and successfully entered into agreements with famous brands in retail and other industries in South America.

(6) For the chemical industry, we optimized the resource deployment and officially initiated the construction project (phase II) of hazardous chemical logistics base in Shanghai and commenced the construction project (phase II) of hazardous chemical logistics base in Nantong. The practical availability of key resources in key projects laid a requisite foundation for the development of the chemical logistics industry. (7) For the cold chain logistics, we developed new markets continuously, improved operational capabilities, and optimized business structure, thus realizing the increase of income and profit.

In the forwarding and related business, we speeded up transformation to the whole- process supply chain, fortified integration capability throughout the network and established a system of six products systems including full container load, less than container load, railway multimodal transportation logistics, air freight, bulk cargo logistics, and carrier integrated logistics services. In particular, less than container load, railway multimodal transportation and air freight services recorded an increase amidst the pandemic. In the first half of 2020, Sinotrans E-LCL service platform cumulatively delivered 2,050 thousand cubic meters of cargo, representing an increase of 12.1% as compared to the corresponding period of last year; international cargo trains cumulatively ran 670 trips, representing an increase of 41.6% as compared to the corresponding period of last year; and the revenue from air freight services increased by nearly 30%, while profit increased by 1.3 times by leveraging higher freight price to conduct precise marketing.

The Company expedited optimization of construction of freight channels by water, land and air. For water freight channel, we strongly boosted the concentrated procurement of shipping capacity for Southeast Asia route. For land freight channel, we made concentrated procurement of 375 trains in the first half of 2020, firmly supporting the delivery of international cargo trains service. For air freight channel, we cumulatively provided customers with 268 temporary charter flights covering Middle East, Asia, Europe and North America, including 225 flights converted from passenger planes and 43 flights cargo planes.

In the e-commercebusiness, we expedited transformation to platform and ecologic system, intensified full-scenario linkage capability and public aggregation capability, accelerated the online operation of full-chain products and the standardization and sharing operation of the three customs service sharing centers, and bolstered the linkage with the transaction platform.

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

In the first half of 2020, the Company continued to optimize services and bolstered the sales and marketing towards large scale e-commerce customers. We also improved the construction of cross-bordere-commerce logistics system and upgraded and iterated the existing structure, order management, reporting management and data docking functions of the relevant main system, added new functions such as product management, charging management, pickup and delivery operation, and online services, and expedited implementation and systematic deployment of regional companies. We intensified construction of main route, channels and network and paid attention to the access of resources in strategic core regions. In the first half of 2020, we established the customs clearance, truck transportation and terminal delivery service system throughout Europe based on Hangzhou-Liege charter flights, taking 80 flights in total. We developed the route from Ningbo/Shanghai to the Port of Long Beach, Los Angeles, the USA, and also provided customs clearance of USA terminal sea freight packages and FBA (Fulfillment by Amazon) and other products and conducted delivery of small packages within the USA. We also opened up sites in Zhengzhou, Changsha and Xi'an and developed China Europe Railway Express e-commerce export service products.

2. In-depth resource integration with continuous improvement of two strategic deployments

For overseas deployment, Sinotrans continued to promote region-based management and network restructuring in Southeast Asia, Africa, the Middle East and South Asia during the Reporting Period, with improved overseas localized service capabilities. In the first half of 2020, the Company completed the acquisition of 100% equity interests in KLG Group, which effectively expanded the European network and formed effective synergy with various existing businesses, representing a good beginning for capital operation effectiveness.

For asset deployment, the Company has positioned Sinotrans Logistics Investment Holdings Co., Ltd. (中外運物流投資控股有限公司) as the unified investment entity of strategic logistics resources and new logistics facilities in the Group, which further guaranteed its infrastructure investment management organization. Meanwhile, it closely followed up and studied the relevant policies of logistics real estate, practically explored the feasibility of asset securitization, private equity fund and cooperation development and continued to promote the separation of light and heavy assets within the Group.

3. Insisted on innovation-driven approach with full acceleration of digital transformation

In the first half of 2020, the Company fully launched digital transformation by setting up a Digital Transformation Office (DTO), and helped to improve quality and efficiency through smart logistics, with full acceleration of digital transformation.

The first was to empower the resumption of work and production with information technology. It improved telecommuting capabilities with information technology internally, and externally empowered customers online services. Logistics Toolbox products helped the customs service sharing centers to conduct multi-places coordination, the Data Assistant integrated business orders, customers, finance, risk and settlement data, and visualization helped the Company to win the battle against the pandemic.

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Management Discussion and Analysis of Business Performance

(Report of the Board)

The second was to help reduce costs and increase efficiency with smart logistics. The Company continued to deepen the R&D and application of ABCDT smart logistics technology in combination with full-scenario and full-chain logistics. The application of such technologies as document recognition processing, smart planning of historical data, smart scheduling and Internet of Things (IoT) platforms has effectively reduced logistics costs and promoted streamlining operation in multiple scenarios such as Sinotrans E-LCL, cross- border e-commerce logistics, customs service sharing center, chemical logistics short- distance transportation, regional distribution center (RDC) receiving and delivering cargo identification and sorting, which increasingly demonstrated its influence with customers and the effect of cost reduction and efficiency enhancement.

During the Reporting Period, the Company newly launched the smart document preparation service, together with the smart document checking service to support the document smart processing platform to provide integrated services for the customs service sharing center and Sinotrans E-LCL; completed R&D and commercialization of the receiving and delivering cargo identification and sorting system with independent intellectual property rights; and completed the implementation of warehouse automation system for chemical logistics and Pudong warehouse of Sinotrans E-LCL.

(II) Highlights of the Business

1. Completion of the acquisition of KLG Group

Breakthrough in the European ground operation network

In the first half of 2020, Sinotrans exercised the second step of the transaction as agreed in the Share Purchase Agreement to complete the acquisition of remaining 20% equity interests of KLG Group, thus KLG Group became a wholly-owned subsidiary of the Company. The acquisition of KLG Group is an important step for Sinotrans to exercise the overseas strategy and expand the overseas channel. KLG Group proved its strong supplementary and supporting function as Sinotrans' European ground operation extension by excellent performance in the first half of 2020. Despite the impact of COVID-19, KLG Group managed to realize revenue of equivalent to RMB678 million and operating profit to more than 74 million. At the same time, KLG Group has initiated the full business coordination with Sinotrans domestic business network, to jointly serve the existing customers and explore the potential end-to-end overseas logistics requirement.

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

2. Sinotrans E-LCL

Rapid volume expansion of the first nation-wide standardized product

Sinotrans E-LCL is the first nation-wide product with unified standards. In the first half of 2020, Sinotrans E-LCL gradually expand its deployment in strategic areas, there were new central and satellite warehouses launched in Shenzhen, Shanghai, Ningbo and other cities. Sinotrans E-LCL closely followed the news of the related markets and fully brought out the logistics channel in Qianhai area to designed the special products including "Guangdong- Hong Kong e-commerce transportation" targeted at the newly launched cross-bordere-commerce policy. Meanwhile, Sinotrans E-LCL made full use of the internal smart logistics technology developed by Sinotrans to continuously improve the digitalization of operation, launched and iterated functions including smart customs service, smart document checking, which didn't only improve the operational efficiency, but also largely optimize the customer experience so as to increase the customer loyalty. In the first half of 2020, impacted by the COVID-19, import volume of ordinary merchandise decreased, while the volume of fragmentized e-commerce related products increased thanks to the change of shopping habit. Reacting to the above situation, Sinotrans E-LCL took the initiative to provide alternative solutions to customers and brought accretive business volume. The nation-wide standardized product of Sinotrans E-LCL was constantly recognized by the target customers and kept winning full network operation customers. In the first half of 2020, Sinotrans E-LCL contributed revenue of approximately RMB240 million, representing an increase of 22.7% as compared to the corresponding period of last year.

3. Charter plane service

Took off against the wind and doubled the profit

In the beginning of 2020, as the COVID-19 broke out at home and abroad, different nations and regions all launched strict anti-pandemic measures and customs quarantine policies. At the same time, the volume of international air travel passengers largely dropped, and major air lines all ceased operation. As 70% of the international air cargo capacity are provided by the belly of passenger flights, the above situation caused sever inadequate supply of international air transportation capacity, plus the surge demand of transporting the anti- pandemic materials, the air transportation freight rate soared to historical high during the first half of this year. Sinotrans has been deployed the air transportation capacity to construct the air channel. Depending on the long term cooperation foundation and business operation capability, Sinotrans managed to resume the Hangzhou-Liège chartered plane ahead of time and increased the frequency from 2 flights per week to 4 flights per week; and totally flied 80 flights, loaded more than 10 thousand tons of cargo in the first half of this year, maintained an air-support live life line between China and European area. Sinotrans also promptly initiated temporary charter flights cooperation with airline companies including Air China, China Southern Airline and Emirates Airline, and also launched the first passenger plane adapted cargo plane on 7 February, to ensure the clear air cargo transportation channel. In the first half of 2020, Sinotrans totally provided 268 temporary charter flights service to customers, which didn't only solve the urgent logistics requirement problems, but also contribute to ensure the safety and stability of local supply chain. The well-established channel operation in return brought satisfactory economic results, in the first half of 2020, the operation profit of air freight forwarding business increased by 1.3 times as compared with the corresponding period of last year.

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Management Discussion and Analysis of Business Performance

(Report of the Board)

4. International railway express

Eye-catching performance with surging volume

Affected by the COVID-19, the international transportation capacity of sea and air largely dropped in the first half of 2020. The China Europe Railway Express and China-Central Asia Railway operated by Sinotrans effectively undertook part of the transfer of capacity demand. During the time, with the support from various level of governments, the five regional subsidiaries and specialized subsidiaries made full use of the existing railway transportation channel, and constantly developed new routes of charter train. As at the end of June 2020, Sinotrans totally launched 670 international freight trains and the volume reached 67.3 thousand TEUs, representing an increase of 35.07% compared with the first half of last year, among which, the China Europe Railway Express launched 612 trains with the volume of 59.2 thousand TEUs, increased 38.24% year-on-year.

(III)Business Segments and Segment Profit (in which, the segment profit is the operating profit of the segment deducting the impact of investment income in associates and joint ventures)

Logistics

In the first half of 2020, external revenue from the Group's logistics business amounted to RMB10,073 million, representing an increase of 1.40% from RMB9,934 million for the corresponding period of last year, because the Group started to consolidate KLG Group from 2020, which contributed RMB678 million of revenue in the first half of this year; and the segment profit amounted to RMB324 million, representing a decrease of 17.44% from RMB392 million for the corresponding period of last year, which was mainly attributable to the decreased business volume because the overseas projects were suspended as the impact of the COVID-19, resulting in the profit of project logistics of the Company dropped by RMB 63 million compared with the first half of last year.

Forwarding and related business

In the first half of 2020, external revenue from the Group's forwarding and related business amounted to RMB26,995 million, representing an increase of 2.92% from RMB26,229 million for the corresponding period of last year; and the segment profit amounted to RMB891 million, representing an increase of 0.69% from RMB885 million for the corresponding period of last year, which was mainly attributable to the volume increase in the China Europe Railway Express service and a year-on-year increase in air freight rates in the first half of 2020.

E-commerce business

In the first half of 2020, external revenue from the Group's e-commerce business amounted to RMB2,623 million, representing an increase of 68.42% from RMB1,557 million for the corresponding period of last year; and the segment profit amounted to RMB59 million, representing an increase of 177.37% from RMB21 million for the corresponding period of last year, which was mainly attributable to the increase in both volume and price of the cross-bordere-commerce logistics business caused by the factors including the COVID-19.

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

(IV)Operation Statistics of Principal Business

	For the six months ended 30 June

	2020	2019

Logistics (in million tons)
Contract Logistics*	15.3	19.7
Project Logistics	2.6	3.2
Chemical Logistics	1.5	1.6
Cold-chain Logistics	0.4	0.6
Forwarding and Related Business
Sea Freight Forwarding (in ten thousand TEUs)	582.6	630.3
Air Freight Forwarding (in million kilograms)	231.5	235.1
Rail Freight Forwarding (in ten thousand TEUs)	7.9	5.4
Shipping Agency (in ten thousand TEUs)	1,143.9	1,303.9
Storage and Terminal Services (in million tons)	8.3	7.5
E-commerce Business
Cross-borderE-commerce Logistics
(in ten thousand units)	9,216.2	7,843.3
Logistics Equipment Sharing Platform
(ten thousand TEUs/day)	8.1	8.4

* Does not include the business volume of KLG Group

External Revenue	(RMB million)

39,691	37,720
	1,557
		2,623

26,995	26,229

10,073

9,934

Segment Profit	(RMB million)

1,274	1,298

59		21

891885

324

392

First Half of 2020	First Half of 2019	First Half of 2020	First Half of 2019
Logistics	Forwarding and related business	Logistics	Forwarding and related business


E-commerce business		E-commerce business

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Management Discussion and Analysis of Business Performance

(Report of the Board)

Key Segment Revenue and Profit

Logistics	(RMB million)

7,647		31	8	-58		918
	16

		First Half of	320	821


		2020			249

						778

External Revenue

Contract logistics	Project logistics
Cold-chain logistics	Other services

Segment Profit

Contract logistics	Project logistics
Cold-chain logistics	Other services

7,183	28 -1 9		1,433

	79
	First Half of	278	855
	2019
			288
			658

Chemical logistics

Forwarding and related business	(RMB million)

		3,017
20,197	107
		1,156
181		249
	2,230
	First Half of

	2020	1,343

176		130
	49	1,794

20,642	61			2,337

	204			778

	First Half of	339	2,124

	2019
				1,295
	191
	15	56		1,653

External Revenue

Sea freight forwarding	Air freight forwarding	Railway freight forwarding

Shipping agency	Storage and terminal services	Other services

Segment Profit

Sea freight forwarding	Air freight forwarding	Railway freight forwarding
Shipping agency	Storage and terminal services	Other services

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

II. MAJOR BUSINESS CONDITIONS DURING THE REPORTING PERIOD

(I) Analysis on Principal Businesses

1. Analysis Statement of Changes to Relevant Items in Statements of Income and Cash Flow

				Unit: Yuan Currency: RMB
		Amount for the
	Amount for the	same period
Item	Reporting Period	of last year	Change (%)	Analysis of reason for changes

Operating income	39,690,976,521.76	37,720,583,082.13	5.22 Mainly due to the following reasons:
				As affected by the worldwide
				pandemic in the first half of 2020,
				the online consumption demand
				further expanded, the volume of
				the cross-bordere-commerce
				logistics business increased; with
				strong market demand for air freight
				forwarding and rising freight price,
				the air freight forwarding business
				recorded a significant income
				growth; and the acquired KLG
				Group was consolidated into the
				consolidated financial statements
				starting from 2020.
Operating cost	37,416,660,358.13	35,330,227,293.42	5.91	Mainly due to the increase in cost
				caused by the increase in income
				from the e-commerce business and
				the air freight forwarding business.
				The increase in cost was slightly
				higher than the increase in income
				due to relatively constant fixed cost,
				though the income from forwarding
				business other than air freight
				forwarding, and logistics business
				decreased as affected by the
				pandemic.
Selling expenses	393,373,867.49	405,350,506.40	-2.95 Mainly due to the decrease in business
				entertainment fees and traveling

expenses for the Reporting Period as affected by the pandemic.

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Management Discussion and Analysis of Business Performance

(Report of the Board)

		Amount for the
	Amount for the	same period
Item	Reporting Period	of last year	Change (%)	Analysis of reason for changes

Administrative expenses	1,173,188,227.76	1,144,189,453.58	2.53 Mainly due to the increase in
				amortisation charges from the
				increase in intangible assets for the
				Reporting Period as affected by the
				acquisition of KLG Group.
Finance cost	185,375,900.34	124,852,662.04	48.48 Because of the depreciation of
				the Belarusian Ruble during the
				Reporting Period, a subsidiary of
				the Company recorded foreign
				exchange losses.
Research and development	52,979,013.84	6,369,330.91	731.78 Mainly due to the Company's step up
expenses				of efforts in IT system research and
				development in order to accelerate
				digital construction.
Net cash flows from	519,158,877.57	-478,672,540.34	N/A	Because the Company improved the
operating activities				turnover of account receivables
				during the Reporting Period, and
				resulting in favorable cash inflow
				situation.
Net cash flows from	-1,137,648,038.18	-205,586,084.50	N/A	Mainly due to the net cash outflow of
investment activities				RMB517 million for the acquisition
				of the remaining 20% equity interest
				in KLG Group, being a wholly
				owned subsidiary of the Group for
				the Reporting Period.
Net cash flows from	-246,122,915.98	-3,441,987,484.97	N/A	Mainly due to the large amount of
financing activities				cash outflows for the repayment
				of various borrowings in the
				corresponding period of last year,
				which didn't occur in the Reporting
				Period.

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

2. Others

(1) Particulars of Material Changes in the Company's Profit Composition or Sources □Applicable 3Not applicable

(2) Cash Flow

	For the six months ended 30 June

	2020	2019
	In RMB million	In RMB million

Net cash flows from operating activities	519.16	-478.67
Net cash flows from investing activities	-1,137.65	-205.59
Net cash flows from financing activities	-246.12	-3,441.99
Effect of changes in exchange rate on cash
and cash equivalents	-23.81	-76.48
Net increase in cash and cash equivalents	-888.42	-4,202.73
Balance of cash and cash equivalents at the
end of the period	9,498.88	11,115.09

Operating Activities

The net cash flows from operating activities increased by RMB998 million from RMB- 479 million for the corresponding period of last year to RMB519 million for the six months ended 30 June 2020. The increase was mainly due to the accelerating of the Group's accounts receivable turnover. The cash received from sales of goods and provision of services was approximately RMB39.53 billion (RMB36.62 billion in the corresponding period of last year), and the cash paid for goods and services was RMB35.13 billion (RMB32.82 billion in the corresponding period of last year). The net amount was RMB4.4 billion (RMB3.8 billion in the corresponding period of last year), with an increase of RMB600 million over the corresponding period of last year; at the same time, cash received from other operating activities increased by RMB386 million over the corresponding period last year.

Investing Activities

The net cash flows from investment activities for the six months ended 30 June 2020 amounted to RMB-1.138 billion, mainly including additions in property, machine and equipment of RMB678 million, additions in intangible assets and other assets of RMB56 million, cash payment for the acquisition of the subsidiaries of RMB522 million, loans to related parties of RMB5 million and increase in investment in associates of RMB3 million, partially offset by the repayment from related parties of RMB51 million, disposal of property, machine and equipment of RMB46 million, cash consideration from disposal of financial assets of RMB22 million and collection of investment in joint ventures and associates of RMB7 million.

32 SINOTRANS LIMITED

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Management Discussion and Analysis of Business Performance

(Report of the Board)

The net cash flows from investment activities for the six months ended 30 June 2019 amounted to RMB-206 million, mainly including additions in property, machine and equipment of RMB736 million, additions in intangible assets and other assets of RMB141 million, additions in other equity-instrument investments of RMB18 million, and the payment of RMB9 million difference between the disposal price of subsidiary and the carrying amount, partially offset by repayments from joint ventures and associates of RMB388 million, received interest of RMB114 million on wealth management products, disposal of property, machine and equipment of RMB129 million, investment gains of RMB40 million, disposal of intangible assets of RMB17 million and collection of investment in joint ventures and associates of RMB11 million.

Financing Activities

The net cash flow generated from financing activities for the six months ended 30 June 2020 amounted to RMB-246 million, mainly including new borrowings of RMB1.551 billion, capital increase from non-controlling shareholders of RMB53 million, loans from related parties of RMB40 million, partially offset by cash repayment of borrowings of RMB1.245 billion, cash repayment of interest of RMB215 million, lease payment of RMB328 million, repayment of loans from related parties of RMB59 million and dividend payment of RMB43 million.

The net cash flow generated from financing activities for the six months ended 30 June 2019 amounted to RMB-3.442 billion, mainly including new borrowings of RMB132 million and capital contribution from non-controlling Shareholders of RMB58 million, partially offset by cash payment of RMB2.31 billion as the repayment of borrowings, payment of non-related party capital transactions of RMB692 million, payment of rental deposits of RMB271 million, cash repayment of interest of RMB248 million, payment of legal advisor consulting fee of RMB55 million in relation to the merger of Sinoair by absorption, payment of transfer consideration of RMB10 million in relation to the acquisition of remaining equity interest of Shenzhen Henglu Logistics Co., Ltd.* and payment of dividend of RMB45 million.

(3) Others

□Applicable 3Not applicable

(II) Explanation on Material Changes in the Profit Resulting from Non- Core Businesses

3Applicable □Not applicable

Credit impairment loss for the Reporting Period was RMB62.8164 million, representing an increase of RMB40.5435 million as compared with RMB22.2730 million for the corresponding period of last year, mainly due to that the Group made full impairment provision for the long-term receivables from Uni-top for the Reporting Period.
Gains on disposal of assets for the Reporting Period was RMB13.8883 million, representing a decrease of RMB50.1824 million as compared with RMB64.0707 million for the corresponding period of last year, mainly due to the absence of gains on disposal of assets of RMB49.1593 million from the disposal of land by the Group's subsidiary Sinotrans Central China Co., Ltd. in the corresponding period of last year.

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

3. Non-operating income for the Reporting Period was RMB37.8015 million, representing a decrease of RMB16.5063 million as compared with RMB54.3078 million for the corresponding period of last year, mainly due to more other gains from favorable judgements and penalty and compensation received in ordinary course of business in the corresponding period of last year as compared with the Reporting Period.

Non-operating expense for the Reporting Period was RMB35.7591 million, representing an increase of RMB26.6343 million as compared with RMB9.1247 million for the corresponding period of last year, mainly due to the effect of provision for accrued liabilities from litigations during the year.

(III)Analysis of Assets and Liabilities

3Applicable □Not applicable

1.		Assets - Liabilities Analysis Table
					Unit: Yuan Currency: RMB
							Percentage of

				Percentage of the			the amount at
				amount at the end		Percentage of the	the end of the
			Amount at	of the Reporting		amount at the end	Reporting Period as
			the end of the	Period to total	Amount at the end	of last year to total	compared to that of
		Item	Reporting Period	assets (%)	of last year	assets (%)	last year (%)

		Cash and bank balances	9,584,505,103.71	14.95	10,475,499,824.16	16.93	-8.51
		Held-for-trading financial assets	142,038.83	0.00	5,641,228.80	0.01	-97.48
	Bills receivable	10,559,111.09	0.02	18,389,129.53	0.03	-42.58
		Long-term receivables	70,070,000.00	0.11	102,637,410.37	0.17	-31.73
		Goodwill	2,315,126,472.63	3.61	172,612,157.55	0.28	1,241.23
		Other non-current assets	333,739,433.55	0.52	225,023,784.54	0.36	48.31
		Short-term borrowings	2,125,987,979.17	3.32	1,202,384,395.00	1.94	76.81
		Bills payable	121,052,287.85	0.19	-	-	N/A
		Dividends payable	952,088,235.26	1.49	47,911,902.30	0.08	1,887.16
		Non-current liabilities due within one year	7,218,000,641.70	11.26	3,268,689,764.93	5.28	120.82
	Long term borrowings	2,809,378,411.44	4.38	5,026,139,244.02	8.12	-44.10
	Bonds payable	1,349,483,424.67	2.11	3,419,486,443.79	5.53	-60.54
	Deferred income tax liabilities	185,621,224.84	0.29	84,261,559.81	0.14	120.29
	Other non-current liabilities	203,084,893.91	0.32	71,319,466.31	0.12	184.75

Other explanations:

(1) The change in cash and bank balances was primarily due to additions in assets and repayment of borrowings.

(2) The change in held-for-trading financial assets was primarily due to that the small amount of targeted asset-backed notes of RMB5.5 million held by the Company was due.

(3) The change in bills receivable was primarily due to the decrease in bills outstanding in the Reporting Period.

34 SINOTRANS LIMITED

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

(4) The change in long-term receivables was primarily due to that the Group made full impairment provision for the long-term receivables from Uni-top for the Reporting Period.

(5) The change in goodwill was mainly because the Group completed the acquisition of KLG Group and included it into the scope of consolidation in the year, resulting in the increase of goodwill.

(6) The change in other non-current assets was primarily due to the change in receivables and payables of Lanshi Port, the Group's trusted asset under management, and the prepayment of new land-use right in the Reporting Period.

(7) The change in short-term borrowings was primarily due to the new offshore short-term financing of RMB716 million for the acquisition of KLG Group in the Reporting Period and the increase in onshore short-term borrowings of the subsidiaries of the Group in the Reporting Period.

(8) The change in bills payable was primarily due to the usage of bills payable for settlement by some subsidiaries of the Group in the Reporting Period.

(9) The change in dividend payable was primarily due to the declaration and payment of 2019 annual dividend of RMB888 million by the Company for the Reporting Period.

The change in non-current liabilities due within one year was primarily due to the reclassification of the portion due within one year (RMB2.063 billion) under bonds payable and the portion due within one year (RMB1.772 billion) under long term borrowings into non-current liabilities due within one year for the Reporting Period, as well as the increase in lease liabilities due within one year.

(11) The change in long term borrowings was primarily due to the reclassification of the portion due within one year under the long term borrowings into non-current liabilities due within one year for the Reporting Period.

(12) The change in bonds payable was primarily due to the reclassification of the portion due within one year under the bonds payable of 2.063 billion into non-current liabilities due within one year for the Reporting Period.

The change in deferred income tax liabilities was primarily due to the increase in temporary difference as a result of the change in the scope of consolidation for the year. For details, please refer to Note VIII. 2 to the financial statements.

(14) The change in other non-current liabilities was primarily due to the increase in liabilities related to Lanshi Port of RMB132 million (i.e. compensation received from the government for demolition and removal), the Group's trusted asset under management, in the Reporting Period.

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

2. Restriction on Major Assets as at the End of the Reporting Period

3Applicable □Not applicable

The major restricted assets of the Company mainly consists of cash and bank balances with litimited usage, such as guaranteed deposit, and collateralized assets for obtaining long-term and short-term borrowings from banks, mainly including the following:

(1) The capital in the accounts of the subsidiaries of the Group, which was under supervision and with limited right of use, amounted to RMB63.9201 million at the end of the Reporting Period, among which, guaranteed deposit amounted to RMB41.7833 million.

(2) To finance the building of the logistics center under "Project Tsing Yi 181", Global Traffic Limited (hereinafter, "Global Traffic"), a subsidiary of the Group, entered into a facility agreement with China Development Bank for the facilities of HK$2.9 billion. China Merchants Holdings (Hong Kong) Company Limited, a related party of the Group, provided a full guarantee. Meanwhile, Global Traffic entered into a debenture with China Development Bank on 26 June 2015, under which the Global Traffic was the charger. As of 30 June 2020, the restricted assets with limited right of use were accounted in investment properties and intangible assets.

For details, please refer to Note IX. 25 to the financial statements.

3. Other Explanations

□Applicable 3Not applicable

(IV)Analysis of Investments

1. Overall Analysis of External Equity Investments

3Applicable □Not applicable

The Group's long-term equity investment at the end of the Reporting Period amounted to RMB7.722 billion, representing a decrease of RMB1.646 billion and a year-on-year decrease of 17.57 % as compared to RMB9.368 billion at the beginning of the year, primarily due to the decrease of RMB2.201 billion in the Reporting Period as a result of changes in the scope of consolidation since the consolidation of KLG Group by the Group on 1 January 2020.

(1) Major equity investment □Applicable 3Not applicable

(2) Major non-equity investment □Applicable 3Not applicable

36 SINOTRANS LIMITED

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

(3) Financial assets at fair value

3Applicable □Not applicable

						Unit: Yuan Currency: RMB
			Acquisition		Disposal	Cost at the
		Cost at the	during the		during the	end of the	At the
	Source of	beginning of	Reporting		Reporting	Reporting	beginning of	At the end of	Investment
Item	funds	the year	Period	Addition	Period	Period	the year	the year	income

Nanjing Port Longtan Container Co., Ltd.	Self-financing	188,756,354.15	-	7,838,446.06	-	196,594,800.21	-	-	-
China Merchants Logistics Synergy	Self-financing	176,113,822.12	-	19,954,848.12	-	196,068,670.24	-	-	-
Limited Partnership
Ouyeel Equity Acquisition	Self-financing	147,747,600.00	-	-	-	147,747,600.00	-	-	-
BOE Technology Group Co., Ltd.	Self-financing	127,133,750.00	-	-	8,711,250.00	118,422,500.00	101,455,250.00	100,600,500.00	-
China United Tally Co., Ltd.	Self-financing	91,441,143.61	-	-	-	91,441,143.61	-	-	-
SINO-BLR Industrial Investment Fund	Self-financing	46,890,242.29	-	-	-	46,890,242.29	-	-	-
Shenyang Airport Logistics Co., Ltd.*	Self-financing	33,730,000.00	-	-	-	33,730,000.00	-	-	-
(瀋陽空港物流有限公司)
Air China Limited	Self-financing	8,076,871.60	-	-	-	8,076,871.60	19,874,873.33	10,990,314.57	-
Pankorea Yingkou Ferry Co., Ltd.	Self-financing	2,896,775.00	-	-	-	2,896,775.00	-	-	-
Pingze Container Port Co., Ltd.*	Self-financing	2,870,000.00	-	1,658.77	-	2,871,658.77	-	-	146,464.00
(平澤集裝箱碼頭有限公司)
Guangdong Waiyun Automobile	Self-financing	805,325.00	-	-	-	805,325.00	-	-	-
Fitting Factory*
(廣東外運汽車服務有限公司)
Chengdu Rongjie Technology Co., Ltd.*	Self-financing	400,000.00	-	-	-	400,000.00	-	-	-
(成都蓉捷科技有限公司)
Ocean Network Express (China) Ltd.	Self-financing	250,000.00	-	-	-	250,000.00	-	-	-
Sichuan Tianhua Co., Ltd.	Self-financing	134,680.92	-	-	-	134,680.92	-	-	-
China Ferry Terminal Services Limited	Self-financing	131,806.25	-	2,589.63	-	134,395.88	-	-	70,389.09
Shenzhen Sealink Technology, LLC*	Self-financing	110,000.00	-	-	-	110,000.00	-	-	-
(深圳市海易通科技有限責任公司)
Taizhou Yiyou Sinotrans Shipping	Self-financing	100,000.00	-	-	-	100,000.00	-	-	-
Agency Co., Ltd.*
(泰州益友中外運船務代理有限公司)
Shaanxi Sinotrans Sanyuan Coal Co., Ltd.*	Self-financing	100,000.00	-	-	-	100,000.00	-	-	-
(陝西中外運三原煤炭有限公司)
Beijing BITEMC Electronic Co., Ltd.	Self-financing	46,500.00	-	-	-	46,500.00	-	-	-
China Merchants Port Holdings	Self-financing	8,958.00	-	-	-	8,958.00	32,270.80	33,080.83	-
Company Limited
Issuance of 2019 First Tranche of RMB	Self-financing	5,500,000.00	-	-	5,500,000.00	-	-	-	333,320.23
Targeted Asset-Backed Notes
Total		833,243,828.94	-	27,797,542.58	14,211,250.00	846,830,121.52	121,362,394.13	111,623,895.40	550,173.32

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

(V) Disposal of Major Assets and Equity

□Applicable 3Not applicable

(VI)Analysis of Major Companies Controlled and Invested in by the Company

3Applicable □Not applicable

1.	Major Subsidiaries Controlled by the Company
							Currency: RMB
							Operating
			Registered		Total assets	Net assets	income	Net profit
			capital	Shareholding	(RMB: ten	(RMB: ten	(RMB: ten	(RMB: ten
	Company Name	Nature of business	(RMB)	(%)	thousand)	thousand)	thousand)	thousand)

	Sinotrans South China Co., Ltd.	Freight forwarding, logistics, and	1,349,668,931.90	100.00	838,984.73	357,494.33	493,182.79	15,430.29
		storage and terminal services
	Sinotrans Logistics Co., Ltd	Logistics	1,444,000,000.00	100.00	2,207,207.91	624,347.03	675,063.32	5,400.96
	Sinotrans Eastern Company	Freight forwarding, logistics, and	1,120,503,439.18	100.00	577,526.23	248,548.84	830,647.93	16,516.92
	Limited	storage and terminal services
	Sinotrans Air Transportation	Air freight forwarding and	905,481,720.00	100.00	1,150,473.85	937,464.10	495,948.33	56,782.40
	Development Co., Ltd.	express services
	Sinotrans Central China Co., Ltd.	Freight forwarding, logistics, and storage	645,339,941.77	100.00	489,670.31	171,828.45	526,358.60	13,607.82
		and terminal services

2.	Major Subsidiaries Invested in by the Company
							Currency: RMB
							Operating
					Total assets	Net assets	income	Net profit
			Registered	Shareholding	(RMB: ten	(RMB: ten	(RMB: ten	(RMB: ten
	Company Name	Nature of business	capital	(%)	thousand)	thousand)	thousand)	thousand)

	DHL-Sinotrans International Air	International express	US$14.50 million	50.00	609,570.62	344,202.41	863,670.74	90,342.94
	Courier Ltd
	China Merchants Loscam	Pallet leasing	US$101	45.00	627,480.33	344,299.02	83,844.55	15,393.13
	International Co., Ltd
	Wuhan Port Container Co., Ltd.	Containers handling and	RMB400 million	30.00	84,061.68	58,224.17	3,305.57	74.90
		freight forwarding

(VII)Structured Entities Controlled by the Company

□Applicable 3Not applicable

38 SINOTRANS LIMITED

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

III. OTHER DISCLOSURES

(I) Warning and Explanation on Anticipated Loss on the Cumulative Net Profits from the Beginning of the Year to the End of the Next Reporting Period or Significant Changes as Compared to the Corresponding Period of Last Year

□Applicable 3Not applicable

(II) Business Development and Outlook

New infrastructure, consumption upgrade and fragmented logistics demand in China will give rise to new growth points, and internal circulation will become an important opportunity for a period of time in the future. Therefore, China will maintain its favorable economic fundamentals in a long run. Meanwhile, the COVID-19 has accelerated the restructuring of the global industrial chain, and stabilizing the industrial chain and supply chain has become top priorities.

In the second half of 2020, the Company will review its positioning in the industrial chain, supply chain and value chain, continue to maintain strategic determination and always implement the strategy-driven and quality and efficiency-based approach, with focus on the following:

1. Enhance market share and adjust the structure to accelerate the development of new growth points

With gradual formation of a new dual circulation development pattern, pursuant to which domestic economic cycle plays a leading role while international economic cycle remains its extension and supplement, we will redefine the market position and adjust our business structure. On the one hand, we will strengthen in-depth cooperation with major strategic customers, and explore upstream and downstream opportunities in the supply chain of existing customers, so as to expand new business areas; on the other hand, we will take the initiative and lead in the restructuring of the global industrial chain and supply chain through "chain supplement, consolidation and enhancement", further strengthen the development of consumer market, import market and online market, and accelerate the development of new growth points.

2. Focus on business transformation and integration, and continue to promote product offering

The Company will continue to focus on the transformation of its three major business segments, form product advantages and select high-quality business lines to sort out business from the perspective of capital operation and effectively promote the integration of internal resources.

For logistics business, we will accelerate the transformation to the integration of value chain, and build a professional logistics product system with industrialized sale, customer driven solution, consolidated service, unified operation and digital empowerment; focus on key subdivided sectors to form standardized logistics solutions, and promote the replication of mature products; develop and promote the replication of digitalized operational management solutions based on the implementation of logistics control tower; continue to strengthen business synergy with KLG Group in such sectors as the automotive and accessories, technology & electronic products and buyer consolidation, and continue to explore the logistics demand in China of KLG Group's existing European customers.

INTERIM REPORT 2020

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Management Discussion and Analysis of Business Performance

(Report of the Board)

For forwarding and related businesses, we will accelerate the transformation to the whole-process supply chain and build a whole-process supply chain product systems. As for FCL, we will further optimize FCL premium products on Southeast Asian routes; as for LCL, we will formulate a consolidated business management model based on unified service standards, continue to expand market share and achieve double-digit growth in annual business volume; as for rail express product, we will focus on the development and operation of high-quality routes, and improve the whole-process service capabilities of special delivery for major customers; as for air transportation, we will continue to develop full-chain products, establish a national air transport product R&D center, and establish a unified headquarter operation system, process management system and price management system, with a focus on close connection between the operation management system and the sales system.

For e-commercebusiness, we will strengthen and accelerate the transformation to platformization and the ecosystem-based model, and collaborate online and offline channels to develop a series of competitive digital products. The platform-based construction of Y2T will continue to follow the integrated online and offline whole chain service model to cover various principal business products; the construction of the industrial interconnection ecosystem will coordinate the development of e-commerce platforms and power seller customers, operate cross-bordere-commercefull-chain products, enrich online product offerings, and continuously extend the service and value chains.

3. Reshape the operating model and accelerate the enhancement of integrated operating capabilities

The Company will drive operations with products, support products with operations, and enhance the differentiated competitiveness of "product + network + model + platform" in interactive empowerment. In this process, the Company will leverage the bridge and link role of the digital operation platform, focus on the practical scenarios of small front end of its products and the strong operational back office, accelerate digital transformation, strive to solve standardization and informatization issues, and improve data quality, process standards and operation system; concentrate on the online operation of its principal businesses and effectively transform the technological innovation achievements into its management benefit.

4. Strengthen technology-driven approach and accelerate digital transformation

In respect of digital transformation, we will promote the implementation of digital transformation plan in an all-round manner, combine digital transformation with quality and efficiency improvement in an organic way, and increase its effort in transformation and empowerment of three major business segments and the construction of large operating systems. In respect of the development of smart logistics, we will perform well in promoting the application of technology to help reduce costs and increase efficiency and intelligence- oriented operations. In respect of the innovation system and mechanism, we will focus on improving product planning and management capabilities, technology R&D and application capabilities; continue to increase research investment and explore innovative investment projects in the field of new logistics technologies; continue to improve the innovation mechanism and stimulate internal innovation vitality.

40 SINOTRANS LIMITED

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

(III)Potential Risks

3Applicable Not applicable

1. Macro economy risk

In 2020, the global macro economy is still in a period of in depth adjustment after the international financial crisis. China's economy has entered a new normal, the macro economy growth rate has slowed down, the long-term positive trend does not change, but there appeared additional uncertain factors, while the trade friction between China and the US and the outbreak of COVID-19. The logistics industry in which the Group operates is closely related to the macroeconomic situation and international trade. Any of the events such as the growth in the macro-economy declines, international trade drops and the fluctuations in the exchange rates of US dollar and the interest rate of RMB intensify in the future may have a negative effect on the development of the logistics industry and the operation of the Group.

Counter measures: The Company strengthens the tracking, research and analysis of the macroeconomic situation, industrial policies, monetary and fiscal policies of major economies related to customers, dynamically adjusts the business structure and customer structure, focuses on high-growth industries to develop logistics business, and strengthens domestic business development, so as to constantly improve its profitability and comprehensive competitiveness. In addition, the Company strengthens the construction of overseas network in Southeast Asia and overseas business, increases the proportion of import business and actively develops new business, so as to create a new profit-making stream. Meanwhile, according to the development of COVID-19, the Company will make timely adjustments to its new marketing and service model during the pandemic to minimize the adverse effects of the pandemic.

2. Industry competition risk

The competition of the Group's principal business in logistics industry is fairly intense. On the one hand, due to the current large number of market participants in logistics industry in China, market competition is continuously intense. In recent years, cross-industrial players like e-commerce companies, shipping companies continuously enter into this market, so that the competition for market share become more intense. On the other hand, China's outstanding logistics companies also conduct the "Going Out" strategy to provide logistics services on a global basis. The competition model in the whole industry has shifted from pure cost and price to differentiated service and management efficiency. Inadequate capabilities in new product design and research and development as well as platform integration will never create core competitiveness, and there is no guarantee that the Company will maintain its current market position and its advantages in market share.

INTERIM REPORT 2020

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Management Discussion and Analysis of Business Performance

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Counter measures: The Company adopts active measures to respond to the change of the competing model and strives for enhancing the ability in industrial solutions and differentiated services. We focus on enhancing products and strengthening operation to build product systems and operating systems, in a great effort to develop core products and enhance our core competitiveness. We attach importance to promoting the establishment of the logistics product system and the construction of the national unified standardized products such as Sinotrans E-LCL and further facilitate the construction of five transportation channels of water, land, air, truck, and overseas. We restructure the Company's business and operations through digital technology to achieve the transformation and upgrading of traditional business models as early as possible and establish a platform operating system with Y2T (運易通) as its unified interface, so as to pave solid foundation of principle business moving to online and the online transactions and strengthen external connection to actively participate in the construction of industrial connecting ecosystem.

3. Operational risk

The Group aims to provide customers with entire value chain and whole-process supply chain service, which involves many logistics operations and links; any improper design of business operation processes or failure to effectively manage and control may lead to freight loss and damage, which may result in direct loss.

Counter measures: The Company strengthens the management and control of the headquarters and the empowerment in a systematic manner. We establish an enterprise- level process framework and data governance system, and strengthen operational monitoring and analysis capabilities. We intensify risk monitoring and prevention and audit supervision. Based on analysis on risks of key enterprises, businesses and risk sectors, targeted special inspection is carried out to actively prevent and reduce risks. We conduct response and alert against risk events, improve risk information integrated framework, optimize risk information analysis template, establish a mechanism of regular analysis and tracking of key risk information, adopt targeted special management and control measures, and urge to improve response measures. We strengthen the training of business operators in front-line operating units and regulate the operation behavior, so as to reduce major potential risks and avoid significant loss in pivotal high risk areas.

4. Investment risk

To meet the Group's strategic transformation and business development, the Group will increase investment in long-term equity, logistics infrastructures such as warehouses, and IT systems, which may result in the unfinished operation of projects and failure to meet profit expectation, which may affect the future cash inflow of the Group.

Counter measures: We coordinate the management of key logistics resources, accelerate asset arrangement and strategic asset investment, optimize the current infrastructure investment management model, and gradually promote the separation of light and heavy assets; we form a forward-looking strategic investment arrangement and perform well in project feasibility analysis; focus on process management and post-investment evaluation of investment projects.

42 SINOTRANS LIMITED

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

(IV)Other Disclosures

3Applicable □Not applicable

1. Merger of Sinoair by absorption

On 31 May 2018, the proposal in relation to merger of Sinoair, a subsidiary of the Company, by absorption through share swap was considered and approved at the Company's extraordinary general meeting and the class general meetings. For details, please refer to the circular disclosed by the Company on the website of the Hong Kong Stock Exchange on 18 April 2018. On 8 October 2018, the merger by absorption through share swap was unconditionally approved by the CSRC. As at 10 January 2019, the Company has completed the issuance of 1,351,637,231 RMB-dominated ordinary shares (A Shares), and public investors of ordinary shares of Sinoair have exchanged the 353,600,322 A shares of Sinoair for 1,351,637,231 A Shares issued by the Company at a ratio of 1:3.8225 (adjusted), and the issuing price is RMB5.24 per share (adjusted). In the meantime, 3,904,279,644 domestic shares held by China Merchants and Sinotrans & CSC were converted into equivalent amount of A Shares. On 18 January 2019, A Shares issued by the Company (total 5,255,916,875 Shares) were officially listed on Shanghai Stock Exchange. As at the date of this report, the Company has completed the business registration of the registered capital change. At present, the Company is carrying forward the relevant legal procedures for the cancellation of the corporate qualification of Sinoair and the transfer of all its assets and liabilities to the Group.

2. Income Tax

For the six months ended 30 June 2020, the Group's income tax expenses amounted to RMB312 million, representing an increase of 33.32% as compared to RMB234 million for the corresponding period of last year, mainly due to the reversal of provision for income tax in relation to the previous-year disposal of overseas equity recognised in the corresponding period of last year, which caused a decrease in income tax in the corresponding period of last year, while there was no such matter in this period.

3. Capital Expenditures

For the six months ended 30 June 2020, the Group's capital expenditure amounted to RMB629 million, among which RMB351 million was used for the construction of infrastructures, ports and terminals facilities and other projects, RMB60 million was used to purchase land and software, RMB161 million was used to purchase assets such as mechanical equipment, containers and vehicles, and RMB58 million was used for renovation and improvement of assets.

INTERIM REPORT 2020

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

4. Securities Investment

As at 30 June 2020, the listed equity investments held by the Group was RMB238 million, the details of which are set out in Note IX. 13 to the financial statements.

5. Contingent Liabilities and Guarantees

As at 30 June 2020, contingent liabilities mainly comprised outstanding lawsuits of the Group arising from its ordinary course of business amounting to RMB461 million (31 December 2019: RMB120 million).

Please see "XI. MATERIAL CONTRACTS AND PERFORMANCE - (II) Guarantee" under "Chapter 5 Significant Matters" of the this Report for details of the guarantees.

6. Borrowings and Bonds

As at 30 June 2020, the Group's total borrowings amounted to RMB9,480 million (31 December 2019: RMB9,002 million), which comprised 811 million denominated in RMB, 439 million in US dollars, 1,871 million in Euro and 6,359 million in Hong Kong dollars. Of the above bank borrowings, RMB4,545 million shall be payable within a year.

As at 30 June 2020, the Group's total bonds payable amounted to RMB3,413 million (31 December 2019: RMB3,419 million). Of the above bonds, RMB2,063 million shall be payable within a year.

Details of borrowings and bonds of the Group as at 30 June 2020 are set out in Note IX. 27, Note IX. 36. Note IX.37 to the financial statements.

7. Secured and Guaranteed Borrowings

Details of the Group's secured and guaranteed borrowings are set out in Note X. 4(5) to the financial statements.

8. Debt-to-Asset Ratio

As at 30 June 2020, the debt-to-asset ratio of the Group was 52.22% (at the end of 2019: 51.12%), which was calculated by dividing total liabilities by total assets of the Group as at 30 June 2020.

9. Government Subsidies

For the six months period ended 30 June 2020, government subsidies received by the Group in relation to profit amounted to RMB625 million in total, details of which are set out in Note IX.60 to the financial statements.

44 SINOTRANS LIMITED

Chapter 4

Management Discussion and Analysis of Business Performance

(Report of the Board)

10. Employees

Number of employees: as at 30 June 2020, the number of employees of the Group was

34,068 (31 December 2019: 33,751).

Training plan: as at 30 June 2020, the offline training of the Group accumulated to 345,674.75 hours with 49,108 participants, while 42,755 online courses were completed (67,815.9 learning hours in total). The training program of the Group mainly included trainings on corporate strategy and corporate culture, basic working skills, business knowledge, elevation of management skills and leadership, new employee orientation and teaching skills training of internal trainer, etc., in the Reporting Period. With the development of the Group, to ensure the constant elevation of the staff quality, the Group will increase the employees' access to trainings and continuously review and improve the training courses to meet the requirement of the business operation and employee development.

Remuneration policy: A remuneration and benefit management system that matches the Company's characteristics has been established pursuant to the Labour Contract Law and relevant laws and regulations to formalise remuneration management. Emolument will be paid for the strategic implementation of key links, the development of unique competitiveness, the training of talents, as well as the effectiveness and production efficiency of staff. The remuneration standards and adjustment plans will be determined based on the Company's cost and budget management range, with reference to market data. Details of employees' remuneration are set out in Note IX.31 to the financial statements.

11. Interim dividend

The Board did not recommend to distribute any interim dividend for the six months ended 30 June 2020.

INTERIM REPORT 2020

Chapter 5

Significant Matters

I. BRIEF INTRODUCTION OF SHAREHOLDERS' GENERAL MEETINGS

		Inquiry index of designated	Disclosure date of
		website for publication of the	the publication of
Sessions of meeting	Date	resolutions	the resolutions

2019 annual general meeting	1 June 2020 The websites of SSE (www.sse.com.cn)	2 June 2020
2020 first extraordinary general meeting		and Hong Kong Stock Exchange
2020 first H Shareholders' class meeting		(www.hkex.com.hk)
2020 first A Shareholders' class meeting

Particulars of general meetings

3Applicable □Not applicable

1. The Company has successively convened 2019 annual general meeting, 2020 first extraordinary general meeting (the "EGM"), 2020 first H Shareholders' class meeting and 2020 first A Shareholders' class meeting (the "Class Meetings") on 1 June 2020.

2. 2019 annual general meeting has considered and approved the following proposals: 1) the resolution in relation to the Work Report of the Board for the year 2019; 2) the resolution in relation to the Work Report of the Supervisory Committee for the year 2019; 3) the resolution in relation to debriefing the Work Report of the Independent Non-executive Directors for the year 2019; 4) the resolution in relation to the Final Financial Accounts Report of the Company for the year 2019; 5) the resolution in relation to the Annual Report of the Company and its summary for the year 2019; 6) the resolution in relation to the financial budget of the Company for the year 2020; 7) the resolution in relation to the profit distribution plan of the Company for the year 2019;

the resolution in relation to the re-appointment of auditor for the year 2020; 9) the resolution in relation to the Directors' remuneration for the year 2019; 10) the general mandate to issue, allot and deal with Shares; 11) the general mandate to repurchase H Shares; 12) the resolution in relation to the Updated Mandate of the issue of Debt Financing Instruments; 13) the resolution in relation to the estimated guarantees of the Company for the year 2020; 14) the resolution in relation to the renewal of Liability Insurance for Directors, Supervisors and Senior Management of the Company; and 15) the re-election of executive Directors of the Company, in which the 11th resolution was also approved by the Class Meetings.

3. The EGM has considered the following proposals: 1) the Share Option Incentive Scheme of Sinotrans Limited (revised draft) (《中國外運股份有限公司股票期權激勵計劃(草案修訂稿)》) and a summary thereof; 2) the Share Option Incentive Scheme of Sinotrans Limited (Phase I) (revised draft) (《中國外運股份有限公司股票期權激勵計劃(第一期)(草案修訂稿)》) and a summary thereof;

the Appraisal Measures for Implementation of the Share Option Incentive Scheme of Sinotrans Limited (《中國外運股份有限公司股票期權激勵計劃實施考核辦法》); 4) the grant of a mandate to the board of directors by the general meeting to deal with matters regarding the Share Option Incentive Scheme of the Company; 5) the grant of a mandate to the board of directors by the general meeting to deal with matters regarding the Share Option Incentive Scheme (Phase I) of the Company; and 6) the amendments to the Articles of Association and the Procedural Rules for General Meetings of the Company. All the above proposals have been submitted to the Class Meetings for consideration at the same time. Among Which, the resolution No.6 has been considered and passed by the EGM and the Class Meetings, while the resolutions from No.1 to No.5 in relation to the share option incentive scheme and share option incentive scheme (phase I) of the Company were not duly passed by way of poll. The Company will actively communicate with Shareholders and continue to study and promote effective long-term incentive schemes when relevant conditions are fully developed, so as to enhance the Company's long- term incentive mechanism, thereby attracting and retaining outstanding talents and promoting the healthy development of the Company and facilitating the maximization of Shareholder's value.

46 SINOTRANS LIMITED

Chapter 5

Significant Matters

II. PROPOSALS OF PROFIT DISTRIBUTION OR CONVERSION OF COMMON RESERVE FUND INTO SHARE CAPITAL

(I) Profit Distribution Proposal and Proposal of Conversion of Common Reserve Fund into Share Capital for the Half Year

Whether to distribute or to convert	No
Number of bonus share per 10 shares (share)	0
Amount of dividend per 10 shares (tax included)	0
Number of shares converted per 10 shares (share)	0
Notes to proposals of profit distribution or conversion of capital reserve fund into share capital	Nil

(II) Implementation of the Profit Distribution Plan for the Year 2019

The Profit Distribution Plan for the year 2019 of the Company has been considered and approved at the 2019 annual general meeting of the Company on 1 June 2020. The dividend for 2019 of RMB1.2 per ten shares (tax included), i.e. RMB0.12 per share (tax included) was declared based on the total share capital of 7,400,803,875 shares, amounting to RMB888,096,465.00 in total (tax included). The aforesaid dividend has been fully distributed in cash on 16 July 2020.

III. PERFORMANCE OF COMMITMENTS

(I) Commitments during or Carried forward to the Reporting Period by the Actual Controllers, Shareholders, Related Parties, Acquirers of the Company and the Company and Other Relevant Parties

3Applicable □Not applicable

Commitment	Commitment type	Commitment by	Summary of the commitment	Time and term of the	Is there a	Whether
background				commitment	term for	timely
					fulfilment	and
						strictly
						fulfilled

Commitments related	Others	Sinotrans & CSC	Within three years from the listing date of A shares of the	Time of commitment:	Yes	Yes
to material asset		The Company	Company, if the closing prices of the A shares for 20	13 April 2018;
restructuring		All Directors,	consecutive trading days are below the latest audited	Term of the commitment:
		Supervisors and	net assets per share of the Company other than due to	18 January 2019 -
		Senior Management	force majeure and malicious speculation of a third party,	17 January 2022
		of the Company	subject to law, regulation, normative documents and the
			Listing Rules in Listing Places and under the premise
			that the shareholding will be in compliance with the
			listing requirement, measures including but not limited
			to increase in shareholding of the A shares by Sinotrans
			& CSC and repurchase of the A share by the Company
			will be taken legally to stabilize the share price of the
			Company's A shares.

INTERIM REPORT 2020

Chapter 5

Significant Matters

From 1 April 2020 to 29 April 2020, the closing prices of the Company's A shares had been lower than the latest audited net assets per share for twenty consecutive trading days for the first time (the latest audited net assets per share of the Company is RMB3.84, with the base date being 31 December 2019, which was stated in the 2019 Annual Report published by the Company), and the preconditions for implementing the measures to stabilize the A share price have been triggered. Considering the actual situation and the practicality of related measures, through discussion, the Company and the controlling shareholder, Sinotrans & CSC have decided to adopt the measure of increasing the shareholding in the A shares of the Company by Sinotrans & CSC to stabilize the A share price of the Company. Sinotrans & CSC will use no less than RMB60 million to increase the shareholding in the A shares of the Company during twelve months starting from 7 May 2020, and the price shall be no higher than the latest audited net assets per share of the Company (since the Company has distributed the dividend for 2019, namely RMB0.12 per share on 16 July 2020, net assets per share of the Company has been adjusted from RMB3.84 to RMB3.72. So far Sinotrans & CSC has been fulfilling its commitment by increasing the shareholding in the A shares of the Company. For details, please refer to the announcements of the Company dated 30 April 2020, 7 May 2020 and 17 July 2020 on the website of SSE.

For other commitments of the Company within their terms, please refer to section titled "PERFORMANCE OF COMMITMENTS" in the 2019 annual report of the Company.

IV. APPOINTMENT AND DISMISSAL OF AUDITORS

Description of the appointment and dismissal of auditors

3Applicable □Not applicable

On 31 March 2020, the 19th meeting of the second session of the Board was convened, at which the proposal in relation to the re-appointment of auditor for the year 2020 was considered and approved. The Board agreed to re-appoint ShineWing Certified Public Accountants LLP as the auditor of the Company for financial reports and internal control for the year 2020, with a term of office until the conclusion of the 2020 annual general meeting of the Company. The total audit fee is RMB9.7 million, among which the audit fees for financial reports and internal control are RMB8.2 million and RMB1.5 million, respectively. The proposal has been considered and approved at the 2019 annual general meeting convened on 1 June 2020 by the Company.

Explanations on change in the auditor during the auditing period

□Applicable 3Not applicable

Explanations of the Company on "Non-Standard Auditing Report" issued by auditors

□Applicable 3Not applicable

48 SINOTRANS LIMITED

Chapter 5

Significant Matters

Explanations of the Company on "Non-Standard Auditing Report" issued by the certified public accountant in the financial report of last year's annual report

□Applicable 3Not applicable

V. EVENTS RELATED TO BANKRUPTCY AND REORGANIZATION

□Applicable 3Not applicable

VI. MATERIAL LITIGATION AND ARBITRATION

□The company was involved in material litigation or arbitration proceedings.

3The company was not involved in material litigation or arbitration proceedings.

VII.PENALTIES AND RECTIFICATION OF LISTED COMPANY, ITS DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, CONTROLLING SHAREHOLDERS, ACTUAL CONTROLLERS AND ACQUIRERS

□Applicable 3Not applicable

VIII.EXPLANATION ON THE INTEGRITY OF THE COMPANY AND ITS CONTROLLING SHAREHOLDERS AND ACTUAL CONTROLLERS DURING THE REPORTING PERIOD

□Applicable 3Not applicable

IX. THE COMPANY'S EQUITY INCENTIVE SCHEME, EMPLOYEE STOCK OWNERSHIP SCHEME OR OTHER EMPLOYEE INCENTIVES AND THE IMPACT THEREOF

(I) Incentives Disclosed in the Temporary Announcements and without Progress or Changes in Subsequent Implementation

□Applicable 3Not applicable

(II) Incentives Undisclosed in Temporary Announcements or with Progress in Subsequent Implementation

Equity incentives

□Applicable 3Not applicable

INTERIM REPORT 2020

Chapter 5

Significant Matters

Other explanations

3Applicable □Not applicable

Summary of Events	Enquiry Index

On 31 March 2020, the 19th meeting of the second session of the Board was convened, at which the proposal in relation to the Share Option Incentive Scheme of Sinotrans Limited (revised draft) (《中國外運股份有限公司股票期權激勵計

劃(草案修訂稿)》) and a summary thereof and the Share Option Incentive Scheme of Sinotrans Limited (Phase I) (revised draft) (《中國外運股份有限公司股票期權激勵計劃(第一期)(草案修訂稿)》) and a summary thereof were considered and approved.

On 3 April 2020, the Company has received the related notice that the SASAC has approved in principle the implementation of the share option scheme.

On 1 June 2020, the Company has convened the EGM and Class Meetings, at which all the proposals in relation to share option incentive scheme were considered but not passed by more than two-thirds of the shares with voting rights.

Employee stock ownership scheme

□Applicable 3Not applicable

Other incentives

□Applicable 3Not applicable

For details, please refer to the announcements of the Company dated 31 March 2020 on the websites of the SSE (www.sse.com.cn) and the Hong Kong Stock Exchange (www.hkex.com.hk).

For details, please refer to the announcements of the Company dated 3 April 2020 on the websites of the SSE (www.sse.com.cn) and the Hong Kong Stock Exchange (www.hkex.com.hk).

For details, please refer to the announcements of the Company dated 1 June 2020 on the websites of the SSE (www.sse.com.cn) and the Hong Kong Stock Exchange (www.hkex.com.hk).

X. MATERIAL RELATED PARTY TRANSACTIONS

(I) Material Related Party Transactions

The material related party transactions undertaken by the Group for the six months ended 30 June 2020 are set out in Note X to the unaudited consolidated interim financial statements.

(II) The Related Party Transactions in Relation to The Ordinary Operations

1. Events Disclosed in the Temporary Announcements and without Progress or Changes in Subsequent Implementation

□Applicable 3Not applicable

50 SINOTRANS LIMITED

Chapter 5

Significant Matters

2. Events Disclosed in the Temporary Announcements but with Progress or Changes in Subsequent Implementation

3Applicable □Not applicable

(1) On 10 November 2017, the Company entered into a Master Services Agreement with China Merchants, the term of which is from 1 January 2018 to 31 December 2020. According to the agreement, the annual cap of the amount of transportation and logistics services provided by the Group to China Merchants Group shall be RMB2,500 million, RMB3,250 million and RMB4,225 million in 2018, 2019 and 2020, respectively; the annual cap of the amount of transportation and logistics services received by the Group from China Merchant Group shall be RMB3,500 million, RMB4,550 million and RMB5,915 million in 2018, 2019 and 2020, respectively. For the six months ended 30 June 2020, the transportation and logistics services provided by the Group to China Merchants amounted to RMB398 million, while the transportation and logistics services received from China Merchants was RMB726 million.

(2) On 10 November 2017, the Company entered into a Master Lease Agreement with China Merchants, the term of which is from 1 January 2018 to 31 December 2020. According to the agreement, the annual cap of the amount of property leased by the Group from China Merchants Group shall be RMB300 million, RMB330 million and RMB363 million in 2018, 2019 and 2020, respectively. For the six months ended 30 June 2020, the expenses of the Group in respect of leasing of properties from China Merchants Group was RMB123 million.

(3) On 10 November 2017, the Company entered into a Financial Services Agreement with the Finance Company, the term of which is from 1 January 2018 to 31 December 2020. According to the agreement, the daily outstanding balance of the Group's deposit at the Finance Company shall not exceed RMB4 billion for the year of 2018, and RMB5 billion for the year of 2019 and 2020 respectively. For the six months period ended 30 June 2020, the Group's daily maximum deposit balance at the Finance Company was RMB3.857 billion.

The aforesaid related party transactions in relation to the daily operations/ continuing connected transactions (1)-(3) have been considered and approved at the extraordinary general meeting convened on 28 December 2017. For details, please refer to the announcements dated 10 November 2017 and 28 December 2017 published by the Company on the website of Hong Kong Stock Exchange (www.hkex.com.hk).

INTERIM REPORT 2020

Chapter 5

Significant Matters

(4) On 7 March 2019, the Company convened the 2019 first extraordinary general meeting, at which the related party transaction in relation to the ordinary operations with China Merchants Bank was considered and approved. According to the proposal, no limit will be imposed on the loan issued by China Merchants Bank, and the annual cap of deposit is RMB3,500 million and RMB4,000 million in 2019 and 2020, respectively. As at 30 June 2020, the Group's deposit balance at China Merchants Bank was RMB705 million.

For details, please refer to relevant announcements dated 21 January 2019 and 7 March 2019 published by the Company on the websites of SSE (www.sse.com.cn) and Hong Kong Stock Exchange (www.hkex.com.hk).

3. Events Not Disclosed in the Temporary Announcements

□Applicable 3Not applicable

(III)Related Party Transactions from Acquisition and Disposal of Assets or Equity Interests

1. Events Disclosed in the Temporary Announcements and without Progress or Changes in Subsequent Implementation

□Applicable 3Not applicable

2. Events Disclosed in the Temporary Announcements but with Progress or Changes in Subsequent Implementation

□Applicable 3Not applicable

3. Events Not Disclosed in the Temporary Announcements

□Applicable 3Not applicable

4. The Performance Achievements during the Reporting Period Shall be Disclosed if Undertakings on Performance is Involved

□Applicable 3Not applicable

(IV)Material Related Party Transactions involving Joint External Investments

1. Events Disclosed in the Temporary Announcements and without Progress or Changes in Subsequent Implementation

Applicable 3Not applicable

2. Events Disclosed in the Temporary Announcements but with Progress or Changes in Subsequent Implementation

Applicable 3Not applicable

3. Events Not Disclosed in the Temporary Announcements

Applicable 3Not applicable

52 SINOTRANS LIMITED

Chapter 5

Significant Matters

(V) Claims and Liabilities between Related Parties

1. Events Disclosed in the Temporary Announcements and with No Progress or Changes in Subsequent Implementation

□Applicable 3Not applicable

2. Events Disclosed in the Temporary Announcements but with Progress or Changes in Subsequent Implementation

□Applicable 3Not applicable

3. Events Not Disclosed in the Temporary Announcements

3Applicable Not applicable

				Unit: Yuan Currency: RMB
	Capital provided to related parties	Capital provided by related parties to listed company
		Amount of the			Amount of the
Related parties	Opening balance	transaction	Closing balance	Opening balance	transaction	Closing balance

Other companies controlled by
the same parent company and
ultimate controlling party	4,040,417,559.57	-850,661,272.40	3,189,756,287.17	1,492,491,576.86	-95,135,707.42	1,397,355,869.44
Associates and joint ventures	683,736,803.34	325,348,304.67	1,009,085,108.01	182,723,536.53	114,909,057.64	297,632,594.17
Other related parties	7,746,417.75	2,837,776.64	10,584,194.39	35,758,741.22	-5,709,605.83	30,049,135.39
Total	4,731,900,780.66	-522,475,191.09	4,209,425,589.57	1,710,973,854.61	14,063,744.39	1,725,037,599.00
Reasons for related debts and	Proceeds in dealings with related companies
liabilities
The impact of related debts and	Related debts and liabilities are conducted based on the time agreed under the contract or agreement in accordance with the
liabilities on the operating	financial settlement process and have no material effect on the operation results and financial position of the Company.
results and financial condition of
Company

(VI) Other Material Related Party Transactions

□Applicable 3Not applicable

(VII)Others

□Applicable 3Not applicable

INTERIM REPORT 2020

Chapter 5

Significant Matters

XI. MATERIAL CONTRACTS AND PERFORMANCE

1. Trusteeship, Contracting and Leasing

□Applicable 3Not applicable

2. Guarantee

3Applicable □Not applicable

Unit: Yuan

Currency: RMB

ExternalguaranteeoftheCompany(excludingthoseprovidedtosubsidiaries)

Relationship

Whether

Guarantee

between

Dateofthe

the

provided

guarantors

guarantee(the

guarantee

Isthe

Guarantee

Iscounter

tothe

andlisted

Guaranteed

dateofthe

Guarantee

Typeof

hasbeen

guarantee

overdue

guarantee

Guarantors

company

Theguaranteedparty

amount

agreement)

beginningdate

maturitydate guarantee

fulfilled

overdue

amount

available

parties

relationships

Sinotrans South China

Subsidiaries

Shenzhen Haixing Harbor 98,184,899.10

1 July

Financingguarantee/

Yes

Associates

Company Limited

Development Co., Ltd.

2019

2037

Jointliability

Ventures

guarantee

Sinotrans South China

Subsidiaries

Dongguan Humen Port

13,009,500.00

27 August

9 January

Financingguarantee/

Yes

Joint Ventures

Company Limited

International Container

2015

2023

Generalguarantee

Terminal Co., Ltd.

Sinotrans Bulk Logistics

Subsidiaries

Sinotrans Sarens

11,949,644.39

6 June

1 July

30 June

Financingguarantee/

Yes

Joint Ventures

Company Limited

Logistics Company

2016

2021

Generalguarantee

Limited

Total guaranteed amount during the Reporting Period (excluding guarantees

provided to subsidiaries)

Balance of total guarantees as at the end of the Reporting Period (A) (excluding

123,144,043.49

guarantees provided to subsidiaries)

Guarantees provided by the Company to subsidiaries

Total guaranteed amount to subsidiaries during the Reporting Period

Total guaranteed balance to subsidiaries as at the end of the Reporting Period (B)

5,362,372,209.99

Total guarantees (including guarantees to subsidiaries) provided by the Company

Total guaranteed amount (A+B)

5,485,516,253.48

Total guaranteed amount as a percentage of the net asset value of the Company (%)

17.91

Of which:

Guaranteed amount provided for shareholders, parties which have de facto control

and their related parties (C)

Debt guaranteed amount provided directly or indirectly to parties with gearing ratio

3,100,331,818.39

exceeding 70% (D)

Total guaranteed amount in excess of 50% of net asset value (E)

Total guaranteed amount of the above three items (C+D+E)

3,100,331,818.39

Statement on the contingent joint liability in connection with unexpired guarantees

Details of guarantee

In addition to the above guarantees, the Company and its holding subsidiaries provide guarantees for the credit lines applied

for by companies within the scope of the consolidated statements. As at 30 June 2020, the total credit guarantees were

RMB2,977,900,000.00

54 SINOTRANS LIMITED

Chapter 5

Significant Matters

3. Other Material Contracts

□Applicable 3Not applicable

XII.THE WORK OF THE LISTED COMPANY ON POVERTY ALLEVIATION

3Applicable □Not applicable

1. Targeted Poverty Alleviation Plan

3Applicable □Not applicable

2020 is the decisive year for the establishment of a moderately prosperous society. Under the overall arrangement of China Merchants, Sinotrans focuses on the general objective of ensuring rural poor people free from worries over food and clothing and accessible to compulsory education, basic medical services and safe housing. Considering the task of poverty elimination in impoverished counties, Sinotrans relies on China Merchants Group Foundation as a professional unified platform for public welfare and spares no effort in carrying out target poverty alleviation work, particularly, in improving education and healthcare condition for people in the impoverished areas. It also attaches importance to the building of brand for agricultural products, driving the endogenous development of communities and solidifying the foundation of regional economic development in order to secure a sustainable effect of poverty alleviation.

2. Summary of Targeted Poverty Alleviation during the Reporting Period

3Applicable □Not applicable

In 2020, Sinotrans donated RMB12 million through the China Merchants Group Foundation as a poverty alleviation fund, the utilization of which shall be planned and implemented by the Foundation. Affected by COVID-19, by the end of June 2020, the China Merchants Group Foundation's expenditure for targeted poverty alleviation amounted to RMB39.863 million and 8 poverty alleviation projects have been launched, which are expected to accelerate in the second half of the year. The main targeted poverty alleviation projects participated by Sinotrans were as follows:

(1) Community development project in rural areas of Qichun, Hubei Province

Sinotrans has introduced professional social organizations to join in the poverty alleviation work in Qichun. A community development project has been implemented in the impoverished rural area, which provides supports to farmers in establishing mutual- aid groups and cooperative, as well as trainings on aquaculture techniques and industrial development to help the poor households to live with their own efforts. In 2020, the project will intensify the capacity building of cooperative, advance the development of agricultural products and industry cultivation to facilitate poverty elimination and income growth of poor households.

INTERIM REPORT 2020

Chapter 5

Significant Matters

(2) Kindergarten project in rural areas of Qichun, Hubei Province

In addressing the shortage of pre-school education in remote rural areas, Sinotrans has introduced social organizations to establish a kindergarten in the northern mountain area of Qichun County and organized trainings for nursery teachers to provide quality pre-school education to rural children. In 2020, in addition to financing the operation of the existing 16 classes, it will open 5 new classes to further expand the pre-school education coverage and break the intergenerational transmission of poverty.

(3) "China Merchants - 27° Agriculture" farmer assistance project (招商局·27°農公益助農項目)

In order to fortify brand building in impoverished areas and leveraging on "27° Agriculture" as a platform, Sinotrans helps to develop more agricultural products, expand distribution channel, create more jobs to assist the poor households to realize sustainable development.

(4) Targeted poverty alleviation projects in Chuxiong, Yunnan Province

Sinotrans supports the infrastructure improvement project in Waipulada Village, Yongren County, the comprehensive community development project in Yongren County, and the project of education-oriented poverty reduction project in Wuding County. Launched in 2019, all the three projects continue in 2020 to further enhance the rural infrastructures and motivate the endogenous growth force of the public. In 2020, Sinotrans financed the construction of a village clinic in Huangguayuan Town, Chuxiong prefecture and Yuanmou County to improve the medical and health conditions of local villagers.

"China Merchants - Happy Community" rural community assistance project ("招商局·幸福家園"鄉村社區支持計劃)

Sinotrans supports nationwide professional organizations to be engaged in rural communities to "improve the endogenous development sense and ability of the communities and address their public needs in a systematic manner", focuses on the "establishment of self-organizing communities" and starts with community public affairs, encourages the villagers' sense and ability of public participation and continuously promotes the positive role of rural governance in poverty alleviation.

3. Effectiveness of Targeted Poverty Alleviation

□Applicable 3Not applicable

56 SINOTRANS LIMITED

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4. Milestones in Performing the Social Responsibility of Targeted Poverty Alleviation

3Applicable □Not applicable

(1) Pandemic fight and poverty alleviation

After the outbreak of COVID-19, located in the severely afflicted Hubei Province, Qichun County was exposed to significant pressures of preventing from poverty returning. As required by the pandemic prevention and control, Sinotrans in association with the China Merchants Group Foundation, launched the first-level emergency response of its non-profit logistics platform "Emergency Delivery" to provide professional logistics service to all sectors of society for the delivery of pandemic prevention and control materials to Hubei without any charges. Total approximately 4,000 tons of anti-pandemic materials were delivered via "Emergency Delivery", which strongly secured the effective supply of anti-pandemic materials in Wuhan, Qichun and other affected areas. Besides, given the unmarketable agricultural products in Qichun due to the pandemic, Sinotrans assisted the farmers to deliver their agricultural products.

(2) Fulfilment of letters of commitment on targeted poverty alleviation entered into with the central government

Sinotrans carried out poverty alleviation work in targeted counties through the China Merchants Group Foundation. As at 30 June 2020, the China Merchants Group Foundation provided poverty alleviation supports to four targeted counties, i.e. Weining in Guizhou, Qichun in Hubei, Yecheng in Xinjiang and Shache in Xinjiang with direct support funds of RMB196.583 million. Besides, it helped attract poverty alleviation funds of RMB4.785 million, provided trainings to 266 grass-roots cadres and 2,109 technicians, purchased agricultural products of RMB6.277 million in targeted poverty alleviation counties, assisted agricultural products sales of RMB5.866 million in targeted poverty alleviation counties and purchased agricultural products of RMB1.948 million in other poverty-stricken counties.

5. Follow-up Targeted Poverty Alleviation Plan

3Applicable □Not applicable

In the second half of 2020, Sinotrans will continue to implement the central government's overall task in respect of winning the decisive battle against poverty. Under the overall arrangement and planning of China Merchants, Sinotrans will further intensify and refine the anti-poverty measures and help the targeted poverty alleviation counties to win the decisive battle against poverty as scheduled and in a quality manner.

(1) Accelerating key project construction and securing poverty elimination

Sinotrans will focus on the general objective of ensuring rural poor people free from worries over food and clothing and accessible to compulsory education, basic medical services and safe housing, especially facilitate the smooth implementation of education, healthcare, housing and other infrastructure projects and oversees the utilization of project fund and progress to expediate poverty elimination in impoverished counties.

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(2) Intensifying industry and consumption-based poverty alleviation for long-term development

Sinotrans will continue to advance the agricultural reform in those poverty-stricken counties and help the farmers to eliminate poverty and broaden revenue streams in an industry- oriented and brand-focused manner. In terms of consumption-based poverty alleviation, Sinotrans will continue to rely on the platform "27° Agriculture" and step up both online and offline efforts in order to make the agricultural products in the poor counties to "develop stably, further and better" and allow the poverty-stricken regions to enjoy more benefits from the market economy.

(3) Improving standardized project management for maximum benefit

Sinotrans will improve project management, adhere to the principle of "open and fair poverty alleviation" (陽光扶貧) and "transparent poverty alleviation" (透明扶貧) and perform special audits on the key projects in poor counties in order to ensure the poverty alleviation projects can stand the test of time and secure poverty alleviation effect.

XIII.CONVERTIBLE BONDS

□Applicable 3Not applicable

XIV.ENVIRONMENTAL INFORMATION

(I) Explanation on Environmental Protection of Companies and Their Significant Subsidiaries Classified as the Key Pollutant Discharging Units Announced by the Environmental Protection Department

□Applicable 3Not applicable

(II) Environmental Protection of the Companies Other than Key Pollutant Discharging Units

3Applicable □Not applicable

The Company is not classified as the key pollutant discharging units announced by the environmental protection department. In the process of operating activities, the Company has complied with relevant national laws and regulations on environmental protection, persisted in carrying out the concept of environmental protection throughout its business operation and management and adhered to the principle that "The environmental protection efforts including energy conservation, emission reduction, quality improvement and efficiency enhancement benefit the country and its people". Regarding the achievement of sustainable development as its target, the Company attaches great importance to improving the energy efficiency and intensifies the establishment of an energy-saving and environment-friendly enterprise.

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In terms of the establishment of organization mechanism, the Company further improved its environmental protection management system, optimized it organization structure and insisted on implementing the energy saving and environmental protection works effectively throughout the production and operation activities to make sure that the main responsibilities of enterprises in energy saving and environmental protection are further fulfilled. Meanwhile, the Company further established and improved the accountability system for energy saving and environmental protection works in line with actual situation to make sure the implementation of all task and measures, which has made substantial achievements.

In terms of energy conservation and emission reduction, the Company reduced tail gas pollution emissions through strict implementation of vehicle emission standards, rational deployment and operation of vehicles, optimization of transportation structure and improvement of vehicle loading rate and mileage utilization; optimized energy consumption structure by using solar energy, LED energy-saving lamps, photovoltaic power generation, as well as clean energy vehicles and eliminating old high energy-consumption equipment; improved operation efficiency and reduced energy consumption by improving business operation process and technology, and introducing automatic operation equipment, combining with the application of new technology and intelligent solution. Through these efforts, we achieved a win-win situation for environmental protection and economic benefits.

In terms of the publicity of environmental protection, the Company extensively carried out the publicity and education campaigns on energy conservation and environmental protection based on actual situation, strived to advocate all employees to strengthen environment protection awareness and take green and low-carbon actions to conserve energy and protect environment, so as to shape the concept of working hard and being thrift.

During the Reporting Period, the Company had a total energy consumption of 40,854 tons of standard coal, representing a decrease of 14.75% as compared to the corresponding period of last year.

(III)Explanation of Reasons for Non-Disclosure of Environmental Information of Companies other than Key Pollutant Discharging Units

□Applicable 3Not applicable

(IV)Explanation of the Subsequent Progress or Changes on the Environmental Information Disclosed during the Reporting Period

□Applicable 3Not applicable

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Chapter 5

Significant Matters

XV.CORPORATE GOVERNANCE

During the Reporting Period, the Company kept improving its corporate governance structure in accordance with the Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies in China promulgated by the CSRC and other applicable laws and regulations, as well as the requirements on corporate governance by the SSE and Hong Kong Stock Exchange. The Company has set up a sound internal control system and constantly promotes the standardized and systematic management to enhance corporate governance.

The Company has reviewed and adopted the principles and provisions of the CG Code as set out in Appendix 14 of the SEHK Listing Rules during the period from 1 January 2020 to 30 June 2020 as our code on corporate governance, and has complied with all code provisions set out in the CG Code.

(I) Members of the Board

As at 30 June 2020, the Board comprised 11 Directors, including: Mr. Li Guanpeng as the chairman; Mr. Song Dexing as the vice chairman; Mr. Song Rong as executive Director; Mr. Su Jian, Mr. Xiong Xianliang, Mr. Jiang Jian, and Mr. Jerry Hsu as non-executive Directors; and Mr. Wang Taiwen, Mr. Meng Yan, Mr. Song Haiqing and Ms. Li Qian as independent non-executive Directors.

The Company has published the list of the Board members with their roles and positions on the websites of Hong Kong Stock Exchange, SSE and the Company. Each Director of the Company acknowledges his/her responsibilities as a Director and is aware of the Company's operation procedure, business activities and development.

(II) Changes in Information of Directors, Supervisors and Senior Management

During the period from 1 January 2020 to 30 June 2020, Directors, Supervisors and Senior Management of the Company have not changed, and no other latest changes in information of Directors, Supervisors and Senior Management of the Company are required to be disclosed in accordance with Rule 13.51B of the SEHK Listing Rules.

(III)Executive Committee

The executive committee is a standing organization under the Board and reports to the Board. The principal responsibilities of executive committee include conducting research and providing advice on the development strategy and material investment decisions of the Company; guiding, examining and monitoring operation management members to carry out the development strategies, operation plans and other decisions made by the Board; and executing the resolutions during the adjournment of Board meetings based on the authorization of the Board.

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As at 30 June 2020, executive committee comprised chairman of the Board Mr. Li Guanpeng, vice chairman Mr. Song Dexing, and executive Director Mr. Song Rong, with Mr. Li Guanpeng acting as the chairman of the executive committee. On 27 August 2020, the 21th meeting of the second session of the Board was convened, at which the Board approved that the executive committee was renamed as the strategy committee, and its responsibilities related to business management decision-making were delegated to the general manager's meeting, only retaining the responsibilities of the strategic decision-making. In addition, the Board supplemented non- executive director Mr. Xiong Xianliang and independent non-executive director Mr. Song Haiqing as members of the strategy committee.

(IV)Audit Committee

The principal responsibilities of the audit committee include reviewing the financial reporting procedure, internal audit and internal control system of the Company, and monitoring integrity of the Company's financial statements, annual reports and accounts and interim reports.

The current audit committee comprises all independent non-executive Directors, namely Mr. Meng Yan, Mr. Wang Taiwen, Mr. Song Haiqing and Ms. Li Qian, with Mr. Meng Yan acting as the chairman of the audit committee.

The audit committee of the Company and ShineWing Certified Public Accountants LLP, the Company's auditor, have reviewed the unaudited consolidated interim financial statements of the Company and its subsidiaries for the six months period ended 30 June 2020.

(V) Remuneration Committee

The principal responsibilities of the remuneration committee include formulating appraisal standards of the Company's Directors and Senior Management as classified by the Articles of Association, arranging assessment, and developing and reviewing the Company's remuneration policy and structure for all Directors and Senior Management.

The current remuneration committee comprises all independent non-executive Directors, namely Ms. Li Qian, Mr. Wang Taiwen, Mr. Meng Yan, and Mr. Song Haiqing, with Ms. Li Qian acting as the chairman of the remuneration committee.

(VI)Nomination Committee

The principal responsibilities of the nomination committee include selecting and making recommendations on candidates for Directors, president of the Company and other Senior Management as classified by the Articles of Association, and the selecting criteria and procedures, and assessing the independence of independent non-executive Directors.

The current nomination committee comprises all independent non-executive Directors and chairman of the Board, namely Mr. Wang Taiwen, Mr. Meng Yan, Mr. Song Haiqing, Ms. Li Qian and Mr. Li Guanpeng, with Mr. Wang Taiwen acting as the chairman of the nomination committee.

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Significant Matters

(VII)Supervisory Committee

The Supervisory Committee reports to general meeting. As a standing supervisory organization of the Company, the principal responsibilities of the Supervisory Committee include supervising the Board and its members, as well as Senior Management (including president, vice president, chief financial officer, board secretary, chief digital officer), to prevent them from abusing authority or infringing the legitimate interests of Shareholders, the Company or Company's staffs, and to safeguard legitimate interests of the Company and Shareholders.

The current Supervisory Committee comprises one shareholder-representative Supervisor, two independent Supervisors and two staff-representative Supervisors, namely Mr. Liu Yingjie, Mr. Zhou Fangsheng, Mr. Fan Zhaoping, Ms. Ren Dongxiao and Ms. Mao Zheng, with Mr. Liu Yingjie acting as the chairman of the Supervisory Committee.

(VIII)Model Code for Securities Transactions by Directors and Supervisors

The Company has adopted the Model Code contained in Appendix 10 to the SEHK Listing Rules as the code of conduct for securities transactions by the Company's Directors and Supervisors.

The Directors and Supervisors have confirmed, following specific enquiries made by the Company that they have complied with the required standard set out in the Model Code and the Company's code of conduct regarding securities transactions by directors and supervisors for the six months from 1 January 2020 to 30 June 2020.

XVI.EXPLANATION ON OTHER MATERIAL MATTERS

(I) Changes of Accounting Policies, Accounting Estimates and Calculation Methods and Their Reasons and Impact Compared to Last Accounting Period

3Applicable □Not applicable

1. CHANGES OF ACCOUNTING POLICIES AND THEIR EFFECTS

The Ministry of Finance issued Interpretation of Accounting Standards for Business Enterprises No. 13 (Cai Kuai [2019] No. 21) on 10 December 2019, Interim Provisions on Accounting Treatment Related to Carbon Emission Trading (Cai Kuai [2019] No. 22) on 16 December 2019, and Accounting Treatment of Rent Concessions Related to the COVID-19 (Cai Kuai [2020] No. 10) on 19 June 2020. The Group has adopted the above interpretations and provisions for the preparation of the financial statements for the six months ended 30 June 2020. Interpretation of the Accounting Standards for Business Enterprises No. 13 and Interim Provisions on Accounting Treatment Related to Carbon Emission Trading have no significant impact on the Group and the Company.

In accordance with the "Accounting Treatment of Rent Concessions Related to the COVID-19", the Group adopts the simplified method for all rent concessions, such as rent reductions and deferred payments, concluded between the Group as a party to a lease contract and a lessor or lessee under an existing lease contract, directly caused by the COVID-19, and does not evaluate whether a lease change has occurred or whether a lease classification has been reevaluated.

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From January-June 2020, the Group obtained rent concessions from the lessor as lessee in the amount of RMB6.1329 million, increasing the total profit by RMB6.1329 million. The amount of rent concessions granted by the Group as lessor to the lessee was RMB2.7708 million, decreasing the total profit by RMB2.7708 million. The rent deferment concession granted by the Group as lessor to the lessee involved an amount of RMB943.9 thousand, and the period of rent deferment was 1-3 months after the rent payment date under the original lease agreement.

2. ACCOUNTING ESTIMATE CHANGE AND ITS IMPACT

According to the relevant provisions of "Accounting Standard for Business Enterprises No. 4

Fixed Assets", at the end of each fiscal year, enterprises shall review the estimated useful lives, net residual values and depreciation methods of fixed assets, and if the estimated useful lives and net residual values of fixed assets differ from the original accounting estimates, adjustments shall be made accordingly. In addition, in accordance with the relevant provisions of Notice of the Ministry of Finance and the State Administration of Taxation on improving the enterprise income tax policy for accelerated depreciation of fixed assets (Cai Shui [2014] No. 75), all fixed assets with a unit value of not more than RMB5,000 held by enterprises are allowed to be deducted in the calculation of taxable income by one- time inclusion of current costs, and depreciation shall no longer be calculated over a period of years. In order to better match the depreciable lives of fixed assets with their actual useful lives, to more accurately reflect the depreciation of fixed assets, and thus to more fairly and appropriately reflect the Group's financial position and operating results, and with reference to the common practice of relevant companies in the same industry, the Group, upon approval at the 19th Meeting of the 2nd Board of Directors of the Company held on 31 March 2020, has, from 1 April 2020 onwards, changed the useful life of the building construction category to 30 years for steel structures, 25 years for steel concrete structures and 20 years for brick concrete structures; changed the useful life of vehicles to 5 years; and changed the fixed asset recognition criteria to RMB5,000. The useful lives and fixed asset recognition criteria before and after this change are as follows:

Before change		After change
	Useful		Useful
	life (years)/		life (years)/
Category/item	amount (Yuan)	Category/item	amount (Yuan)

Buildings - production buildings,	40	Buildings - steel structure	30
Buildings - office buildings		Buildings - steel concrete structure	25
		Buildings - brick concrete structure	20
Buildings - storage buildings	25	Buildings - steel structure	30
		Buildings - steel concrete structure	25
		Buildings - brick concrete structure	20
Vehicles	6	Vehicles	5
Fixed asset recognition threshold	2,000	Fixed asset recognition threshold	5,000

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Chapter 5

Significant Matters

According to the provisions of "Accounting Standard for Business Enterprises No. 28 - Changes in Accounting Estimates, Accounting Policies and Error Correction", the future applicable method is adopted in this accounting estimate change, which has no impact on the financial status and operating results of the Group and the Company in previous years.

This change in accounting estimate resulted in a decrease in total profit of RMB13.0864 million for the period.

(II) Correction of Significant Accounting Errors Required to be Restated, the Amount after Correction, Reasons and Impact during the Reporting Period

□Applicable 3Not applicable

(III)Others

□Applicable 3Not applicable

64 SINOTRANS LIMITED

Chapter 6

Movement of Ordinary Shares and Particulars of Shareholders

I. CHANGES IN SHARE CAPITAL (I) Table of Changes in Shares

1. Table of Changes in Shares

During the Reporting Period, there is no change in the total share numbers and shareholding structure of ordinary shares of the Company.

2. Particulars of Changes in Shares

□Applicable 3Not applicable

3. Effect of Changes in Shares on Financial Indicators such as Earnings per Share and Net Assets per Share within the Period from the End of the Reporting Period to Disclosure Date of the Interim Report (if any)

□Applicable 3Not applicable

4. Other Contents that the Company Deems Necessary or Security Regulatory Authorities Require to Disclose

□Applicable 3Not applicable

(II) Changes in Restricted Shares

□Applicable 3Not applicable

II. PARTICULARS OF SHAREHOLDERS

(I) Number of Shareholders:

Number of ordinary Shareholders at the end of the Reporting Period
(shareholders)	72,058
Number of preferred Shareholders with restored voting rights at the end of the
Reporting Period (shareholders)	0

Note: At the end of the Reporting Period, the Company has 71,930 A shareholders and 128 registered H shareholders.

INTERIM REPORT 2020

Chapter 6 Movement of Ordinary Shares and Particulars of Shareholders

(II) The Shareholding of the Top 10 Shareholders and Top 10 Outstanding Shareholders (or holders of unrestricted shares) at the End of the Reporting Period

							Unit: share
	Shareholding of the top 10 shareholders
	Increase or	Number of			Pledged or
	decrease	shares held			frozen status
	during the	at the end of
Name of Shareholders	Reporting	the Reporting	Percentage	Number of	Shares		Nature of
(Full Name)	Period	Period	(%)	shares lock-up	Status	Number	shareholders

Sinotrans & CSC Holdings	6,090,000	2,467,686,200	33.34	2,461,596,200	Nil	0	State-owned
Co., Ltd.							legal person
HKSCC NOMINEES LIMITED	-46,050	2,107,429,399	28.48	0	Unknown	Unknown	Overseas legal
							person
China Merchants Group Limited	0	1,600,597,439	21.63	1,442,683,444	Nil	0	State-owned
							legal person
Hong Kong Securities Clearing	12,467,607	54,439,330	0.74	0	Nil	0	Overseas legal
Company Limited (香港中央結							person
算有限公司)
Central Huijin Asset Management	0	51,346,878	0.69	0	Nil	0	State-owned
Co., Ltd. (中央匯金資產管理有							legal person
限責任公司)
China National Machinery Imp. &	0	37,849,623	0.51	0	Nil	0	State-owned
Exp. Corp. (中國機械進出口							legal person
(集團)有限公司)
DEUTSCHE POST	0	35,616,000	0.48	0	Unknown	Unknown	Overseas legal
BETEILIGUNGEN HOLDING							person
China Securities Finance Co.,	0	31,129,481	0.42	0	Nil	0	State-owned
Ltd. (中國證券金融股份有限							legal person
公司)
Chen Jingjian	-2,613,022	14,730,606	0.20	0	Nil	0	Domestic
							natural
							person
BTG Hotels (Group) Co., Ltd. (北	0	13,354,749	0.18	0	Nil	0	State-owned
京首旅酒店(集團)股份有限公司)							legal person

66 SINOTRANS LIMITED

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Movement of Ordinary Shares and Particulars of Shareholders

Shareholding of the Top 10 Holders of Unrestricted Shares
	Number of	Class and number of shares
	unrestricted
Name of shareholders	shares	Class	Number

HKSCC NOMINEES LIMITED	2,107,429,399	Foreign shares listed	2,107,429,399
		overseas
China Merchants Group Limited	157,913,995	Ordinary shares	157,913,995
		denominated in RMB
Hong Kong Securities Clearing Company Limited	54,439,330	Ordinary shares	54,439,330
(香港中央結算有限公司)		denominated in RMB
Central Huijin Asset Management Co., Ltd.	51,346,878	Ordinary shares	51,346,878
(中央匯金資產管理有限責任公司)		denominated in RMB
China National Machinery Imp. & Exp. Corp.	37,849,623	Ordinary shares	37,849,623
(中國機械進出口(集團)有限公司)		denominated in RMB
DEUTSCHE POST BETEILIGUNGEN HOLDING	35,616,000	Foreign shares listed	35,616,000
		overseas
China Securities Finance Co., Ltd.	31,129,481	Ordinary shares	31,129,481
(中國證券金融股份有限公司)		denominated in RMB
Chen Jingjian	14,730,606	Ordinary shares	14,730,606
		denominated in RMB
BTG Hotels (Group) Co., Ltd.	13,354,749	Ordinary shares	13,354,749
(北京首旅酒店(集團)股份有限公司)		denominated in RMB
Chen Lijuan	10,470,777	Ordinary shares	10,470,777
		denominated in RMB
Explanations on the related-party relations	Sinotrans & CSC is a wholly-owned subsidiary of China
or acting in concert among the above	Merchants.
shareholders
Explanations on the shares and voting rights	Nil
restored of preferred shareholders

INTERIM REPORT 2020

Chapter 6 Movement of Ordinary Shares and Particulars of Shareholders

Shareholdings of Top 10 Shareholders with Trading Restrictions and Conditions of Such Restrictions

3Applicable Not applicable

					Unit: share
			Availability of the restricted
			shares for listing
			and trading
				Number of
				additional
			Available	shares
		Number of	time for	available for
	Name of holders of	restricted	listing and	listing and	Restriction
No.	restricted shares	shares	trading	trading	conditions

1	Sinotrans & CSC Holdings Co., Ltd.	2,461,596,200	18 July 2022	0	Note 1
2	China Merchants Group Limited	1,442,683,444	18 July 2022	0
Explanations on the related-party	Sinotrans & CSC is a wholly-owned subsidiary of China
relationships or acting in concert	Merchants.
among the above shareholders

Note 1:Upon the Company's merger of Sinoair by absorption through share swap, China Merchants and Sinotrans

CSC undertook that, within 36 months from the listing date of A Shares of the Company (From 18 January 2019 to 17 January 2022), they shall not transfer the Shares held directly or indirectly by themselves which issued prior to the merger by absorption (excluding H Shares) to any other person (including the Company), or entrust the management of such Shares to any other person. Such lock-up period will be extended for another 6 months if the closing price of A Shares is below the issue price for 20 consecutive trading days during the first 6 months after listing or the closing price of A Shares on the last trading day of such first 6 months is below the issue price. The A Shares of the Company have been listed on SSE on 18 January 2019. Given the situation that the closing price of the Company's A Shares was below the issue price as described above occurred within six months from the listing date, the lockup period of A Shares converted from original domestic shares held by China Merchants and Sinotrans & CSC will automatically be extended for another six months to 17 July 2022.

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Movement of Ordinary Shares and Particulars of Shareholders

(III)Interests and Short Positions of Substantial Shareholders Disclosed as Required by SFO

As at 30 June 2020, so far as the Directors of the Company were aware, the following persons (other than Directors, Supervisors and chief executives) had interests and short positions in the Shares of the Company which were required to be disclosed to the Company and Hong Kong Stock Exchange pursuant to the provisions in Divisions 2 and 3 of Part XV of SFO, or to be recorded in the register kept by the Company pursuant to Section 336 of SFO.

				Percentage in	Percentage
	Corporate	Class of	total issued	in issued H
Name	interests	Shares	Share capital	Share capital

China Merchants (Note 1)	4,068,283,639 (L)	A Shares	54.97%	-
	176,444,000 (L)	H Shares	2.38%	8.23%
Pandanus Associates Inc. (Note 2)	238,545,000 (L)	H Shares	3.22%	11.12%
Brown Brothers Harriman & Co.	182,953,138 (L)	H Shares	2.47%	8.53%
(Note 3)
	182,953,138	(P)	H Shares	2.47%	8.53%
Citigroup Inc. (Note 4)	141,203,541 (L)	H Shares	1.91%	6.58%
	19,389,000	(S)	H Shares	0.26%	0.90%
	121,812,086	(P)	H Shares	1.65%	5.68%
FIDELITY FUNDS (Note 5)	130,884,721 (L)	H Shares	1.77%	6.10%
LSV ASSET MANAGEMENT (Note 6)	128,534,000 (L)	H Shares	1.74%	5.99%

Note: (L) Long Position, (S) Short Position, (P) Lending Pool

Notes:

1. As of 30 June 2020, China Merchants held 57.35% of the Company's total issued shares. China Merchants directly held 1,600,597,439 A Shares (long position), and indirectly held 2,467,686,200 A Shares (long position) and 176,444,000 H Shares (long position) through Sinotrans & CSC, its wholly owned subsidiary, and Sinotrans

CSC indirectly held 176,444,000 H Shares (long position) through its subsidiaries, among which Sinotrans (Hong Kong) Holdings Ltd. held 106,683,000 H Shares (long position), Sinotrans Shipping Inc. held 500,000 H Shares (long position), and Sinotrans Shipping Limited held 69,261,000 H Shares (long position).

2. According to the Disclosure of Interests Form submitted by Pandanus Associates Inc. on the website of Hong Kong Stock Exchange, 238,545,000 H Shares (long position) are interests of corporations controlled by substantial shareholders, of which 47,248,000 H Shares (long position) are reported as unlisted derivatives settled in cash, and 2,279,562 H Shares (long position) are reported as unlisted derivatives physically settled.

3. According to the Disclosure of Interests Form submitted by Brown Brothers Harriman & Co. on the website of Hong Kong Stock Exchange, Brown Brothers Harriman & Co. held 182,953,138 H Shares (long position) in the capacity of agent, all of which were lending pool.

4. According to the Disclosure of Interest Form submitted by Citigroup Inc. on the website of Hong Kong Stock Exchange, Citigroup Inc. held 121,812,086 H Shares (long position) in the capacity of approved lending agent, and 19,391,455 H Shares (long position) and 19,389,000 H Shares (short position) are interests of corporations controlled by substantial shareholders, in which 33,000 H Shares (long position) and 678,000 H Shares (short position) are reported as unlisted derivatives settled in cash.

5. According to the Disclosure of Interests Form submitted by FIDELITY FUNDS on the website of Hong Kong Stock Exchange, FIDELITY FUNDS held 130,820,000 H Shares (long position) in the capacity of beneficial owner, and 64,721 H Shares (long position) are interests of corporations controlled by substantial shareholders.

INTERIM REPORT 2020

Chapter 6 Movement of Ordinary Shares and Particulars of Shareholders

6. According to the Disclosure of Interests Form submitted by LSV ASSET MANAGEMENT on the website of Hong Kong Stock Exchange, LSV ASSET MANAGEMENT held 87,013,000 H Shares (long position) in the capacity of investment manager. 41,521,000 H Shares (long position) are deemed interest through its general partnership interest in certain limited partnerships.

Save as disclosed above, as at 30 June 2020, so far as the Directors of the Company were aware, there was no other person (other than Directors, Supervisors or chief executives) who had any interests and short positions in the Shares of the Company which would fall to be recorded in the register kept by the Company pursuant to Section 336 of SFO and disclosed to the Company and Hong Kong Stock Exchange pursuant to the provisions in Divisions 2 and 3 of Part XV of SFO.

(IV)Strategic Investors or General Legal Person Become Top 10 Shareholders Due to the Placement of New Shares

□Applicable 3Not applicable

III. CHANGES OF CONTROLLING SHAREHOLDERS OR ACTUAL CONTROLLERS

□Applicable 3Not applicable

IV. REPURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY

During the six months ended 30 June 2020, none of the members of the Group has repurchased, sold or redeemed any listed securities of the Company.

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Chapter 7

Particulars of Preferred Shares

□Applicable 3Not applicable

INTERIM REPORT 2020

Chapter 8

Directors, Supervisors and Senior Management

I. CHANGES IN SHAREHOLDING

(I) Changes in Shareholding of Current and Resigned Directors, Supervisors and Senior Management During the Reporting Period

□Applicable 3Not applicable

Other information

□Applicable 3Not applicable

(II) The Equity Incentives Granted to the Directors, Supervisors and Senior Management During the Reporting Period

□Applicable 3Not applicable

(III)Interests and Short Positions of the Directors, Supervisors and Chief Executives

As at 30 June 2020, so far as the Directors of the Company were aware, none of the Directors, Supervisors, chief executives or their associates had any interests in any shares or debentures and short positions of the Company or any associated corporation of the Company which were required to be notified to the Company and Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of SFO (including interests and short positions which they are deemed to have under such provisions of the SFO), or which were required pursuant to Section 352 of SFO to be recorded in the register kept by the Company referred to therein, or which were required to be notified to the Company and Hong Kong Stock Exchange pursuant to the Model Code.

II. C H A N G E S	O F D I R E C T O R S ,	S U P E R V I S O R S A N D S E N I O R
MANAGEMENT OF THE COMPANY
	3Applicable □Not applicable
	Name	Position held	Changes

	Tian Lei	General counsel	Appointed

Explanations of changes of Directors, Supervisors and Senior Management of the Company

3Applicable □Not applicable

On 27 August 2020, the 21th meeting of the second session of the Board was convened, at which the proposal in relation to appointment of general counsel of the Company was considered and approved. The Board approved that Tian Lei was appointed as the general counsel of the Company. For details, please refer to relevant announcements of the Company disclosed on the websites of SSE (www.sse. com.cn) and Hong Kong Stock Exchange (www.hkex.com.hk).

III. OTHERS

□Applicable 3Not applicable

72 SINOTRANS LIMITED

Chapter 9

Particulars of Corporate Bonds

3Applicable □Not applicable

I. BASIC INFORMATION OF CORPORATE BONDS

					Unit: hundred million Yuan Currency: RMB
			Date of		Balance	Interest	Manner of payment of	Transaction
Name of bond	Short name	Code	issuance	Maturity date	of bond	rate (%)	principal and interest	site

Sinotrans Limited 2016	16 SINOTRANS 01 136248	2 March 2016	2 March 2021	20	3.20	Annual interest, no	SSE
Corporate Bond (First							compound interest,
Tranche)							repayment of principal
							upon maturity
Sinotrans Limited 2016	16 SINOTRANS 03 136654	24 August 2016	24 August 2021	13.5	2.94 (24	Annual interest, no	SSE
Corporate Bond						August	compound interest,
(Second Tranche)						2016 - 23	repayment of principal
						August	upon maturity
						2019);
						3.70 (24
						August
						2019 - 23
						August
						2021)

Investor Suitability Arrangements: "16 Sinotrans 01" and "16 Sinotrans 03" are bonds traded to qualified investors.

Interest Payment of Corporate Bonds

3Applicable □Not Applicable

The Company paid the interest of RMB64 million on the 16 Sinotrans 01 corporate bonds on 2 March 2020, and paid the interest of RMB49.95 million on the 16 Sinotrans 03 corporate bonds on 24 August 2020, all of which were announced on the website of the SSE.

Other Particulars of Corporate Bonds

3Applicable □Not Applicable

According to the announcement disclosed on 29 July 2019, the Company increased the coupon rate of the "16 Sinotrans 03" corporate bonds for the subsequent duration by 76 basis points, namely the coupon rate would be 3.70% for last 2 years within the duration of the bond and remain unchanged. According to the results of put-back of "16 Sinotrans 03" corporate bond, the number of put-back of "16 Sinotrans 03" corporate bonds was 150,000 lots (10 bonds for one lot, and each bond with a nominal value of RMB100), and the amount of put-back was RMB150,000,000 (exclusive of interest), the release date of the put-back funds was 26 August 2019. After the compeletion of put-back, the number of "16 Sinotrans 03" corporate bonds listed and traded on the SSE was 1,350,000 lots (the total par value is RMB1,350,000,000). For details, please refer to the announcements of the Company dated 29 July 2019 and 21 August 2019 disclosed on the website of SSE.

INTERIM REPORT 2020

Chapter 9

Particulars of Corporate Bonds

II. CONTACT PERSON AND CONTACT METHOD OF BOND TRUSTEE AND CONTACT INFORMATION OF CREDIT RATING AGENCIES

Bonds trustee	Name	BOCI Securities Limited
	Address	No. 110, Xidan North Avenue, Xicheng District, Beijing
	Contact Person	He Yinhui, Zhou Yuqing
	Telephone	010-66229138
Credit rating agency	Name	Shanghai Brilliance Credit Rating & Investors Service Co., Ltd.
	Address	14FL. Huasheng Building, No.398 Hankou Rd, Huangpu
		District, Shanghai
Other Explanations:

□Applicable 3Not Applicable

III. USE OF PROCEEDS FROM CORPORATE BONDS

3Applicable □Not Applicable

Upon receipt of the proceeds, the Company has transferred the proceeds from the special account to its own fund account. To use such fund, the Company exercised the related approval procedure of fund expend, and strictly followed the purposes of proceeds agreed in the prospectus, which mainly included the port charges, supplier payment, storage fees and other paying in relation to the daily operation. There is no exception situations, and the closing balance of the proceeds is 0 currently.

IV. RATING OF CORPORATE BONDS

3Applicable □Not Applicable

Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. has given a credit rating of AAA on the issuer in relation to the corporate bonds, demonstrating that the issuer has a strong ability to repay its debts and is basically not affected by the adverse economic environment, with low level of default risk; and the current debt rating of the corporate bonds "16 Sinotrans 01" and "16 Sinotrans 03" is AAA, demonstrating that the bonds have strong creditworthiness and security to be repaid, and is basically not affected by the adverse economic environment, with low level of default risk. The rating is dated 26 May 2020 and the rating outlook is stable, with no changes as compared to last rating results. The Company has disclosed the Rating Report on Sinotrans Limited and Corporate Bonds "16 Sinotrans 01" and "16 Sinotrans 03" issued by Sinotrans Limited on the website of the SSE.

V. CREDIT ENHANCEMENT MECHANISM, DEBT REPAYMENT PLAN AND OTHER RELEVANT INFORMATION OF CORPORATE BONDS DURING THE REPORTING PERIOD

3Applicable □Not Applicable

After the issuance of the Corporate Bonds, the Company will further strengthen the management of assets and liabilities, liquidity management and the management of the use of proceeds according to the debt structure, ensure that the funds are used as planned, and timely and fully prepare the funds for the annual interest payment and principal repayment upon maturity, so as to fully protect the interests of investors.

74 SINOTRANS LIMITED

Chapter 9

Particulars of Corporate Bonds

In order to fully and effectively protect the interests of bondholders, the Company has formulated
a series of work plans for the timely and full repayment	of corporate bonds, including formulating
the Rules for Bondholders' Meetings, giving full play to	the role of bond trustee manager, setting
up a special repayment working group, strictly fulfilling	the information disclosure obligations and

the Company's commitments, etc., striving to form a set of guarantee measures to ensure the safe payment of interest and redemption of bonds.

The debt repayment plan and other debt repayment supporting measures have not been changed and are implemented normally, which is in line with the relevant undertakings in the prospectus.

VI. CONVENING OF CORPORATE BOND HOLDERS' MEETING

□Applicable 3Not Applicable

VII.PERFORMANCE OF CORPORATE BONDS TRUSTEE MANAGER

3Applicable □Not Applicable

During the term of the corporate bonds, BOCI Securities Limited ("BOCI Securities"), the bonds trustee manager, strictly complied with the stipulations in the Bonds Trustee Management Agreement to continuously track the Company's credit status, management and use of proceeds, repayment of principal and interest of the corporate bonds, and urge the Company to perform its obligations as stipulated in the prospectus of the corporate bonds. It has actively exercised the duties of the trustee manager and safeguarded the legitimate rights and interests of the bondholders. The entrusted management for corporate bonds of Sinotrans Limited in 2019 by BOCI Securities was disclosed on the website of the SSE in June 2020.

VIII.ACCOUNTING DATA AND FINANCIAL INDICATORS AS AT THE END OF THE REPORTING PERIOD AND LAST YEAR (OR DURING THE REPORTING PERIOD OR THE CORRESPONDING PERIOD OF LAST YEAR)

3Applicable □Not Applicable

			Changes as
	As at the end of		compared to the
	the Reporting	As at the end	end of last year
Main indicators	Period	of last year	(%)

Current ratio	1.01	1.25	-19.20
Quick ratio	0.91	1.14	-20.18
Debt-to-asset ratio (%)	52.22	51.12	increased by 1.1
			percentage points
Loan repayment ratio (%)	100	100	-

INTERIM REPORT 2020

Chapter 9

Particulars of Corporate Bonds

			Changes as
			compared to the
	Reporting		corresponding
	Period (January	Corresponding	period of
	to June)	period of last year	last year (%)

EBITDA interest coverage ratio	10.63	9.73	9.25
Interest payment ratio (%)	100	100	-

IX. OVERDUE DEBTS

□Applicable 3Not applicable

X. INTEREST PAYMENT OF OTHER BONDS AND DEBT FINANCING INSTRUMENTS OF THE COMPANY

3Applicable □Not applicable

			Unit: hundred million Currency: RMB
				Subject/
			Term of	Debt	Coupon
Type	Abbreviation of bonds	Issue size	issuance	Rating	rate

ABN	19 Sinotrans ABN001 Priority	10.45	0.52 year	AAA	3.45%
	Products
ABN	19 Sinotrans ABN001 Subprime	0.55	0.52 year	-	-
	Products

On 19 December 2019, the Company issued "Sinotrans Limited 2019 First Tranche of RMB Targeted Asset-backed Notes for Accounts Receivable (ABN)" in the inter-bank market, with a total reserve of RMB ABN amounting to RMB5 billion. The issuance size was RMB1.1 billion for this time. During the Reporting Period, the products were due and have been fully redeemed.

XI. BANK CREDIT OF THE COMPANY DURING THE REPORTING PERIOD

3Applicable □Not applicable

As at 30 June 2020, the Company has obtained a total of 28.091 billion (equivalent to RMB) of credit facilities, of which RMB10.324 billion has been utilized. The bank loans involved have been repaid on time.

76 SINOTRANS LIMITED

Chapter 9

Particulars of Corporate Bonds

XII.PERFORMANCE OF RELEVANT AGREEMENTS OR UNDERTAKINGS IN THE PROSPECTUS OF CORPORATE BONDS BY THE COMPANY DURING THE REPORTING PERIOD

□Applicable 3Not applicable

XIII.SIGNIFICANT MATTERS OF THE COMPANY AND THEIR IMPACT ON THE OPERATION AND SOLVENCY OF THE COMPANY

□Applicable 3Not applicable

INTERIM REPORT 2020 77

Chapter 10

Consolidated Statement of Financial Position

30 June 2020

			Unit: RMB
Items	Note	30 June 2020	31 December 2019

Current assets
Cash and bank balances	IX.1	9,584,505,103.71	10,475,499,824.16
Held-for-trading financial assets	IX.2	142,038.83	5,641,228.80
Derivative financial assets		-	-
Bills receivable	IX.3	10,559,111.09	18,389,129.53
Accounts receivable	IX.4	11,536,561,808.33	10,114,964,014.88
Receivables financing	IX.5	611,782,370.73	600,596,569.69
Prepayments	IX.6	2,672,717,846.94	2,246,807,826.72
Other receivables	IX.7	1,574,839,729.65	1,637,377,987.43
Including: Interest receivable	IX.7	1,396,067.84	1,281,663.75
Dividends receivable	IX.7	58,462,551.98	53,247,750.69
Inventories	IX.8	108,771,328.88	125,293,322.01
Including: Raw materials	IX.8	31,104,352.56	32,116,251.48
Finished goods	IX.8	62,714,203.09	72,872,532.03
Contract assets		-	-
Held-for-sale assets		-	-
Non-current assets due within one year	IX.9	12,205,000.00	12,085,000.00
Other current assets	IX.10	581,828,237.38	626,309,693.00
Total current assets		26,693,912,575.54	25,862,964,596.22

Non-current assets
Debt investments		-	-
Other debt investments		-	-
Long-term receivables	IX.11	70,070,000.00	102,637,410.37
Long-term equity investments	IX.12	7,721,774,959.45	9,368,359,302.17
Other equity instrument investments	IX.13	238,090,186.17	256,540,744.93
Other non-current financial assets	IX.14	720,221,791.93	692,424,249.35
Investment properties	IX.15	2,395,331,683.17	2,384,160,216.45
Fixed assets	IX.16	12,283,671,605.50	12,472,503,554.46
Construction in progress	IX.17	2,402,098,808.89	2,154,496,943.35
Right-of-use assets	IX.18	2,291,027,930.75	1,990,676,405.63
Intangible assets	IX.19	6,101,110,537.07	5,688,540,222.83
Development expenditure	IX.20	84,663,311.11	81,415,404.91
Goodwill	IX.21	2,315,126,472.63	172,612,157.55
Long-term prepaid expenses	IX.22	215,976,989.78	220,746,710.04
Deferred tax assets	IX.23	237,836,762.68	213,306,245.86
Other non-current assets	IX.24	333,739,433.55	225,023,784.54
Total non-current assets		37,410,740,472.68	36,023,443,352.44
Total assets		64,104,653,048.22	61,886,407,948.66

The notes form an integral part of the financial statements

The financial statements are signed by the following persons-in-charge:

Li Guanpeng	Wang Jiuyun	Mai Lina
Person-in-charge of	Person-in-charge for	Person-in-charge of
the Company	Accounting work	Accounting Department

78 SINOTRANS LIMITED

Chapter 10

Consolidated Statement of Financial Position

30 June 2020

			Unit: RMB
Items	Note	30 June 2020	31 December 2019

Current liabilities
Short-term borrowings	IX.27	2,125,987,979.17	1,202,384,395.00
Held-for-trading financial liabilities		-	-
Derivative financial liabilities		-	-
Bills payable	IX.28	121,052,287.85	-
Accounts payable	IX.29	9,547,286,216.70	9,147,046,027.11
Advances from customers		-	-
Contract liabilities	IX.30	3,049,692,183.63	2,608,389,707.64
Employee remuneration payable	IX.31	1,292,878,013.63	1,589,693,735.12
Including: Wages payable	IX.31	1,055,888,559.45	1,380,010,118.64
Welfare payable	IX.31	28,950,883.97	3,103,605.13
Taxes and dues payable	IX.32	371,113,955.82	344,533,438.22
Including: Taxes payable	IX.32	354,654,348.11	330,229,457.47
Other payables	IX.33	2,415,771,477.59	2,322,174,917.92
Including: Interest payable	IX.33	28,223,909.54	26,339,510.69
Dividends payable	IX.33	952,088,235.26	47,911,902.30
Held-for-sale liabilities		-	-
Non-current liabilities due within one year	IX.34	7,218,000,641.70	3,268,689,764.93
Other current liabilities	IX.35	184,224,950.88	177,858,416.72
Total current liabilities		26,326,007,706.97	20,660,770,402.66

Non-current liabilities
Long-term borrowings	IX.36	2,809,378,411.44	5,026,139,244.02
Bonds payable	IX.37	1,349,483,424.67	3,419,486,443.79
Including: Preferred shares		-	-
Perpetual bonds		-	-
Lease liabilities	IX.38	1,755,115,255.85	1,519,924,346.73
Long-term payables	IX.39	187,457,752.59	197,265,698.20
Long-term employee remuneration payable	IX.40	2,871,823.21	2,927,039.77
Estimated liabilities	IX.41	283,797,569.38	269,495,938.63
Deferred income	IX.42	375,277,451.05	383,338,591.29
Deferred tax liabilities	IX.23	185,621,224.84	84,261,559.81
Other non-current liabilities	IX.43	203,084,893.91	71,319,466.31
Total non-current liabilities		7,152,087,806.94	10,974,158,328.55

Total liabilities		33,478,095,513.91	31,634,928,731.21

INTERIM REPORT 2020 79

Chapter 10

Consolidated Statement of Financial Position

30 June 2020

				Unit: RMB
Items		Note	30 June 2020	31 December 2019

Shareholders' equity:
Share capital		IX.44	7,400,803,875.00	7,400,803,875.00
Other equity instruments		-	-
Including: Preferred shares		-	-
Perpetual bonds		-	-
Capital reserve		IX.45	6,073,127,048.74	6,072,706,510.86
Less: Treasury shares			-	-
Other comprehensive income	IX.65	-130,746,103.26	-157,971,711.23
Including: Translation琀	difference of the financial
statements in foreign currency	IX.65	-289,347,183.86	-346,519,139.10
Specific reserve		IX.46	65,544,747.02	53,520,819.76
Surplus reserve		IX.47	899,046,022.99	899,046,022.99
Including: Statutory reserve fund	IX.47	899,046,022.99	899,046,022.99
Discretionary reserve fund		-	-
Retained earnings		IX.48	14,504,852,538.79	14,170,510,834.74
Total equity attributable to shareholders
of the Company			28,812,628,129.28	28,438,616,352.12

Non-controlling interests		1,813,929,405.03	1,812,862,865.33
Total shareholders' equity		30,626,557,534.31	30,251,479,217.45

Total liabilities and shareholders' equity		64,104,653,048.22	61,886,407,948.66

The notes form an integral part of the financial statements

80 SINOTRANS LIMITED

Chapter 10

Statement of Financial Position of the Company

30 June 2020

			Unit: RMB
Items	Note	30 June 2020	31 December 2019

Current assets
Cash and bank balances	XVII.1	3,143,672,051.64	4,073,217,980.63
Held-for-trading financial assets		-	5,500,000.00
Derivative financial assets		-	-
Bills receivable	XVII.2	397,802.00	2,397,802.00
Accounts receivable	XVII.3	575,856,845.63	923,919,956.37
Receivables financing	XVII.4	24,956,140.30	31,467,958.31
Prepayments		17,221,476.68	42,499,589.99
Other receivables	XVII.5	9,785,772,967.90	9,724,300,157.45
Including: Interest receivable	XVII.5	-	-
Dividends receivable	XVII.5	55,399,600.47	90,850,271.49
Inventories		-	-
Including: Raw materials		-	-
Finished goods		-	-
Contract assets		-	-
Held-for-sale assets		-	-
Non-current assets due within one year		244,828,165.97	474,753,841.96
Other current assets		51,034,421.09	49,001,005.00
Total current assets		13,843,739,871.21	15,327,058,291.71

Non-current assets
Debt investments		-	-
Other debt investments		-	-
Long-term receivables	XVII.6	1,637,288,242.96	1,395,344,773.34
Long-term equity investments	XVII.7	18,362,779,537.04	18,235,853,446.45
Other equity instrument investment		-	-
Other non-current financial assets		901,731,350.32	901,731,350.32
Investment properties		-	-
Fixed assets		38,945,890.35	37,188,420.62
Construction in progress		5,729,534.72	9,981,594.87
Right-of-use assets		553,646,821.91	566,551,383.29
Intangible assets		112,102,860.56	110,015,988.57
Development expenditure		72,430,728.80	68,007,661.41
Goodwill		-	-
Long-term prepaid expenses		1,161,682.05	1,452,172.11
Deferred tax assets		-	-
Other non-current assets		-	-
Total non-current assets		21,685,816,648.71	21,326,126,790.98

Total assets		35,529,556,519.92	36,653,185,082.69

The notes form an integral part of the financial statements

INTERIM REPORT 2020 81

Chapter 10

Statement of Financial Position of the Company

30 June 2020

			Unit: RMB
Items	Note	30 June 2020	31 December 2019

Current liabilities
Short-term borrowings		-	-
Held-for-trading financial liabilities		-	-
Derivative financial liabilities		-	-
Bills payable		-	-
Accounts payable		428,983,287.69	465,817,720.54
Advances from customers		-	-
Contract liabilities		28,010,103.28	52,705,643.61
Employee remuneration payables		59,840,241.77	108,608,409.41
Including: Wages payable		40,159,749.98	88,564,582.22
Welfare payable		4,739,226.83	49,614.66
Taxes and dues payable		9,565,795.64	10,656,185.73
Including: Taxes payable		9,352,289.26	10,438,832.19
Other payables		8,875,917,284.19	10,603,685,432.96
Including: Interest payable		-	-
Dividends payable		888,387,102.89	290,637.89
Held-for-sale liabilities		-	-
Non-current liabilities due within one year		2,079,027,255.06	515,427,269.58
Other current liabilities		-	-
Long-term borrowings		11,481,343,967.63	11,756,900,661.83

Non-current liabilities
Long-term borrowings	XVII.8	116,875,000.00	116,875,000.00
Bonds payable	XVII.9	1,349,483,424.67	3,419,486,443.79
Including: Preferred shares		-	-
Perpetual bonds		-	-
Lease liabilities		576,859,477.66	585,032,846.05
Long-term payables		-	-
Long-term employee remuneration payable		-	-
Estimated liabilities		-	-
Deferred income		-	-
Deferred tax liabilities		-	-
Other non-current liabilities		-	-
Total non-current liabilities		2,043,217,902.33	4,121,394,289.84

Total liabilities		13,524,561,869.96	15,878,294,951.67

82 SINOTRANS LIMITED

Chapter 10

Statement of Financial Position of the Company

30 June 2020

			Unit: RMB
Items	Note	30 June 2020	31 December 2019

Shareholders' equity:
Share capital		7,400,803,875.00	7,400,803,875.00
Other equity instruments		-	-
Including: Preferred shares		-	-
Perpetual bonds		-	-
Capital reserve	XVII.10	10,764,008,546.37	10,764,008,546.37
Less: Treasury shares		-	-
Other comprehensive income		-13,127,595.65	-12,970,901.77
Including: Translation difference of the statements
in foreign currency		1,015,121.22	1,171,815.10
Specific reserve		4,036,718.36	4,080,696.43
Surplus reserve		899,046,022.99	899,046,022.99
Including: Statutory reserve fund		899,046,022.99	899,046,022.99
Discretionary reserve fund		-	-
Retained earnings	XVII.11	2,950,227,082.89	1,719,921,892.00
Total shareholders' equity		22,004,994,649.96	20,774,890,131.02

Total liabilities and shareholders' equity		35,529,556,519.92	36,653,185,082.69

The notes form an integral part of the financial statements

INTERIM REPORT 2020 83

Chapter 10 Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the six months ended 30 June 2020

						Unit: RMB
					Six months ended	Six months ended
Items			Note	30 June 2020	30 June 2019

I.	Total income from operations	IX.49	39,690,976,521.76	37,720,583,082.13
	Including: Operating income	IX.49	39,690,976,521.76	37,720,583,082.13
II.	Total costs of operation		39,303,590,404.24	37,108,851,749.63
	Including: Operating costs	IX.49	37,416,660,358.13	35,330,227,293.42
		Tax and surcharges	IX.50	82,013,036.68	97,862,503.28
		Selling expenses	IX.51	393,373,867.49	405,350,506.40
		Administrative expenses	IX.52	1,173,188,227.76	1,144,189,453.58
		Research and development expenses	IX.53	52,979,013.84	6,369,330.91
		Finance costs	IX.54	185,375,900.34	124,852,662.04
		Including: Interest expenses	IX.54	255,626,050.59	285,154,240.86
		Interest income	IX.54	82,416,739.99	131,911,131.46
		Net exchange loss
			(income denoted by "-")	IX.54	12,090,390.03	-27,303,864.61
	Add:	Other income	IX.55	642,682,349.85	493,041,415.84
		Investment income (loss denoted by "-")	IX.56	580,899,833.38	625,647,215.09
		Including: Share of results of associates
			and joint ventures	IX.56	581,298,071.77	592,996,770.87
		Income from derecognition
			of financial assets
			measured at amortised
		cost (loss denoted by "-")	IX.56	-	-
		Hedging income (loss denoted by "-")		-	-
		Gain from changes in fair value
		(loss denoted by "-")		-	-
		Credit loss impairment
		(loss denoted by "-")	IX.57	-62,816,446.17	-22,272,959.42
		Impairment of assets
		(loss denoted by "-")		-	-
		Income from disposal of assets
		(loss denoted by "-")	IX.58	13,888,297.34	64,070,728.81
III.	Operating profit (loss denoted by "-")		1,562,040,151.92	1,772,217,732.82
	Add:	Non-operating income	IX.59	37,801,457.35	54,307,782.62
		Including: Government grants	IX.59	23,509,684.89	12,485,688.08
	Less:	Non-operating expenses	IX.61	35,759,092.53	9,124,743.65
IV.	Total profit (total loss denoted by "-")		1,564,082,516.74	1,817,400,771.79
	Less:	Income tax expenses	IX.62	312,442,987.79	234,358,439.67
V. Net profit (net loss denoted by "-")		1,251,639,528.95	1,583,042,332.12
	(I) Classified by attribution of ownership		-	-
	1.Net profit attributable to shareholders of the
		Company (net loss denoted by "-")		1,215,123,919.62	1,517,484,875.36
	2.Net profit attributable to non-controlling
	interests (net loss denoted by "-")		36,515,609.33	65,557,456.76
	(II)Classified by the continuity of operations		-	-
	1.Net profit from continuing operations
	(net loss denoted by "-")		1,251,639,528.95	1,583,042,332.12
	2.Net profit from discontinued operations
		(net loss denoted by "-")		-	-

The notes form an integral part of the financial statements.

84 SINOTRANS LIMITED

Chapter 10

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the six months ended 30 June 2020

				Unit: RMB
			Six months ended	Six months ended
Items		Note	30 June 2020	30 June 2019

VI. Other comprehensive income, net of tax	IX.65	8,571,560.47	1,606,646.75
Other comprehensive income attributable to
shareholders of the Company, net of tax	IX.65	34,539,857.40	-3,184,834.58
(I) Other琀	comprehensive income not to be

subsequently reclassified to profit or loss	IX.65	-2,425,059.33	46,350,772.21
1. Amount of change arising from re-
	measurement of the defined benefit plan		-	-
2. Other comprehensive income not to be
	reclassified to profit or loss under the
	equity method		-	-
3. Changes in fair value of other equity
	instrument investments	IX.65	-2,425,059.33	46,350,772.21
4. Changes in fair value attributable to
	changes in credit risk		-	-
5. Others		-	-
(II) Other琀	comprehensive income to be
subsequently reclassified to profit or loss	IX.65	36,964,916.73	-49,535,606.79
1. Other comprehensive income to be
	reclassified to profit or loss under the
	equity method	IX.65	-20,207,038.51	7,793,447.85
2. Changes in fair value of other debt
	investments		-	-
3. Reclassification of financial assets		-	-
4. Credit loss impairment of other debt
	investments		-	-
5. Cash flow hedge reserve (effective portion
	of gains or losses from cash flow
	hedges)		-	-
6. Exchange differences on translation of
	foreign operations	IX.65	57,171,955.24	-57,329,054.64
7. Others		-	-
Other comprehensive income attributable to
non-controlling interests, net of tax		-25,968,296.93	4,791,481.33
VII. Total comprehensive income	IX.65	1,260,211,089.42	1,584,648,978.87
Total comprehensive income attributable to
shareholders of the Company	IX.65	1,249,663,777.02	1,514,300,040.78
Total comprehensive income attributable to
non-controlling interests	IX.65	10,547,312.40	70,348,938.09
VIII. Earnings per share:
Basic earnings per share (RMB/share)	IX.63	0.16	0.21
Diluted earnings per share (RMB/share)	IX.63	0.16	0.21

The notes form an integral part of the financial statements.

INTERIM REPORT 2020 85

Chapter 10 Statement of Profit or Loss and Other Comprehensive Income of the Company

For the six months ended 30 June 2020

					Unit: RMB
				Six months ended	Six months ended
Items		Note	30 June 2020	30 June 2019

I.	Income from operations	XVII.12	1,111,408,150.24	826,536,613.30
	Less: Operating cost	XVII.12	983,003,480.45	653,973,419.87
	Tax and surcharges		185,247.10	188,508.37
	Selling expenses		39,595,373.78	59,895,889.56
	Administrative expenses		98,772,387.97	106,038,356.31
	Research and development expenses		41,024,085.49	4,125,643.65
	Finance costs	XVII.13	-59,426,587.52	8,705,457.43
	Including: Interest expenses		113,774,080.78	141,876,998.00
	Interest income		140,112,585.07	131,061,252.84
	Net exchange loss
	(gain denoted by "-")		-25,889,765.99	-3,825,013.64
	Add: Other income		-	-
	Investment income (loss denoted by "-")	XVII.14	2,104,338,238.08	928,711,100.23
	Including: Share of result of associates
		and joint venture		36,404,500.12	30,055,931.22
	Income from derecognition of
		financial assets measured
		at amortised cost
	(loss denoted by "-")		-	-
	Hedging income (loss denoted by "-")		-	-
	Gain from changes in fair value
	(loss denoted by "-")		-	-
	Credit loss impairment (loss denoted by "-")		7,477,864.23	4,820,187.10
	Impairment of assets (loss denoted by "-")		-	-
	Income from disposal of assets
	(loss denoted by "-")		-475.58	10,000.00
II.	Operating profits (loss denoted by "-")		2,120,069,789.70	927,150,625.44
	Add: Non-operating income		339,784.55	1,707,510.88
	Including: Government grants		-	5,000.00
	Less: Non-operating expenses		2,007,918.36	515,859.95
III. Total profit (total loss denoted by "-")		2,118,401,655.89	928,342,276.37
	Less: Income tax expenses		-	153,600.00
IV. Net profit (net loss denoted by "-")		2,118,401,655.89	928,188,676.37
	Net profit from continuing operations
	(net loss denoted by "-")		2,118,401,655.89	928,188,676.37
	Net profit from discontinued operations
	(net loss denoted by "-")		-	-

86 SINOTRANS LIMITED

Chapter 10

Statement of Profit or Loss and Other Comprehensive Income of the Company

For the six months ended 30 June 2020

					Unit: RMB
				Six months ended	Six months ended
Items			Note	30 June 2020	30 June 2019

V. Other comprehensive income, net of tax		-156,693.88	-353.74
(I)	Other comprehensive income not to be
	subsequently reclassified to profit or loss		-	-
	1.	Amount of change arising from re-
		measurement of the defined benefit plan		-	-
	2.	Other comprehensive income not to be
		reclassified to profit or loss under the
		equity method		-	-
	3.	Changes in fair value of other equity
		instruments investments		-	-
	4.	Changes in fair value attributable to changes
		in credit risk		-	-
	5.	Others		-	-
(II)	Other comprehensive income to be
		subsequently reclassified to profit or loss		-156,693.88	-353.74

1. Other comprehensive income to be reclassified to profit or loss under the

	equity method	-	-
2.	Changes in fair value of other debt
	investments	-	-
3.	Reclassification of financial assets	-	-
4.	Credit loss impairment of other debt
	investments	-	-
5.	Cash flow hedge reserve (effective portion of
	gains or losses from cash flow hedges)	-	-
6.	Translation difference of the financial
	statements in foreign currency	-156,693.88	-353.74
7.	Others	-	-
VI. Total comprehensive income	2,118,244,962.01	928,188,322.63

The notes form an integral part of the financial statements.

INTERIM REPORT 2020 87

Chapter 10

Consolidated Statement of Cash Flows

For the six months ended 30 June 2020

				Unit: RMB
			Six months ended	Six months ended
Items	Note	30 June 2020	30 June 2019

I.	Cash flows from operating activities:
	Cash received from sales of goods and provision		39,530,210,727.84
	of services		36,622,618,858.29
	Tax rebate received		5,662,755.53	1,771,297.86
	Cash received from other operating activities	IX.66	992,291,988.78	606,626,246.66
Sub-total of cash inflows from operating activities		40,528,165,472.15	37,231,016,402.81
	Cash paid for goods and services		35,134,022,954.64	32,824,929,664.02
	Cash paid to and on behalf of employees		3,072,643,828.70	2,916,645,777.22
	Cash paid for taxes and dues		640,833,329.45	793,696,973.45
	Cash paid for other operating activities	IX.66	1,161,506,481.79	1,174,416,528.46
Sub-total of cash outflows from operating activities		40,009,006,594.58	37,709,688,943.15
Net cash flows from operating activities	IX.66	519,158,877.57	-478,672,540.34
II.	Cash flows from investment activities		22,001,712.16
	Cash received from disposal of investments		10,843,782.83
	Cash received from investment income		7,377,020.17	40,078,948.86
	Net cash received from the disposal of fixed assets,		45,549,842.09
	intangible assets and other long-term assets		146,042,121.57
	Net cash received from disposal of subsidiaries and		-
	other operating units		-
	Cash received from other investment activities	IX.66	50,954,211.86	501,954,254.43
Sub-total of cash inflows from investment activities		125,882,786.28	698,919,107.69
	Cash paid for acquisition of fixed assets, intangible		734,089,799.48
	assets and other long-term assets		876,982,356.42
	Cash paid for investments		2,500,000.00	18,137,829.66
	Net cash paid for acquisition of subsidiaries and		521,941,024.98
	other operating units	IX.66	-
	Cash paid for other investment activities	IX.66	5,000,000.00	9,385,006.11
Sub-total of cash outflows from investment activities		1,263,530,824.46	904,505,192.19
Net cash flows from investment activities		-1,137,648,038.18	-205,586,084.50
III. Cash flows from financing activities:		52,838,252.00
	Cash received from capital contributions		58,307,400.00
	Including: Cash received by subsidiaries from capital		52,838,252.00
	contributions of non-controlling interests		58,307,400.00
	Cash received from borrowings		1,551,443,357.29	132,285,392.18
	Cash received from other financing activities	IX.66	39,912,768.23	-
Sub-total of cash inflows from financing activities		1,644,194,377.52	190,592,792.18
	Cash paid for repayment of debts		1,245,535,037.18	2,309,901,422.03
	Cash paid for distribution of dividends or profits or		257,983,464.62
	settlement of interest		292,935,872.56
	Including: Dividends and profits paid by the		43,148,412.68
	subsidiaries to non-controlling interests		44,740,223.30
	Cash paid for other financing activities	IX.66	386,798,791.70	1,029,742,982.56
Sub-total of cash outflows from financing activities		1,890,317,293.50	3,632,580,277.15
Net cash flows from financing activities		-246,122,915.98	-3,441,987,484.97
IV. Effect of foreign exchange rate changes		-23,805,980.64	-76,484,492.59
V.	Net increase (decrease) in cash and cash
	equivalents	IX.67	-888,418,057.23	-4,202,730,602.40
	Add: Balance of cash and cash equivalents at the		10,387,299,779.72
	beginning of the period		15,317,824,974.56
VI. Balance of cash and cash equivalents at the
	end of the period	IX.67	9,498,881,722.49	11,115,094,372.16

The notes form an integral part of the financial statements.

88 SINOTRANS LIMITED

Chapter 10

Statement of Cash Flows of the Company

For the six months ended 30 June 2020

				Unit: RMB
			Six months ended	Six months ended
Items	Note	30 June 2020	30 June 2019

I.	Cash flows from operating activities:
	Cash received from sales of goods and provision
	of services		1,450,765,402.89	731,388,092.90
	Tax rebate received		-	-
	Cash received from other operating activities		120,193,754.93	23,087,189.73
Sub-total of cash inflows from operating activities		1,570,959,157.82	754,475,282.63
	Cash paid for goods and services		966,772,508.17	713,742,455.46
	Cash paid to and on behalf of employees		151,164,628.49	113,373,863.60
	Cash paid for taxes and dues		425,857.26	5,704,661.01
	Cash paid for other operating activities		446,890,182.57	80,840,139.64
Sub-total of cash outflows from operating activities		1,565,253,176.49	913,661,119.71
Net cash flows from operating activities	XVII.15	5,705,981.33	-159,185,837.08
II.	Cash flow from investment activities:
	Cash received from disposal of investments		5,500,000.00	-
	Cash received from investment income		2,103,792,572.25	626,941,045.44
	Net cash received from the disposal of fixed
	assets, intangible assets and other long-term
	assets		585.60	246,487.85
	Cash received from other investment activities		95,255,059.84	462,362,571.72
Sub-total of cash inflows from investment activities		2,204,548,217.69	1,089,550,105.01
	Cash paid for acquisition of fixed assets, intangible
	assets and other long-term assets		25,021,589.41	28,141,836.64
	Cash paid for investments		90,929,753.74	100,000,000.00
	Cash paid for other investment activities		181,584,489.79	2,121,773,417.13
Sub-total of cash outflows from investment activities		297,535,832.94	2,249,915,253.77
Net cash flows from investment activities		1,907,012,384.75	-1,160,365,148.76
III. Cash flows from financing activities:
	Cash received from capital contributions		-	-
	Cash received from borrowings		500,000,000.00	-
	Cash received from other financing activities		8,423,986.40	3,511,980,495.71
Sub-total of cash inflows from financing activities		508,423,986.40	3,511,980,495.71
	Cash paid for repayment of debts		1,000,000,000.00	-
	Cash paid for distribution of dividends or profits or
	settlement of interest		99,254,800.11	132,277,569.76
	Cash paid for other financing activities		2,273,196,691.67	1,039,770,862.31
Sub-total of cash outflows from financing activities		3,372,451,491.78	1,172,048,432.07
Net cash flows from financing activities		-2,864,027,505.38	2,339,932,063.64
IV. Effect of foreign exchange rate changes		2,960,476.97	8,382,889.09
V.	Net increase in cash and cash equivalents		-948,348,662.33	1,028,763,966.89
	Add: Balance of cash and cash equivalents at the
	beginning of the period		4,072,964,005.08	2,232,379,636.67
VI. Balance of cash and cash equivalents at the
	end of the period		3,124,615,342.75	3,261,143,603.56

The notes form an integral part of the financial statements.

Unit: RMB

															Six months ended 30 June 2020
														Equity attributable to owners of the Company
																Including:
																Translation
																difference of
										Other equity instruments				Other	the financial						Total
										Preferred	Perpetual			Less: Treasury	comprehensive	statements in					Non-controlling	shareholders'
Items								Share capital	shares	bonds	Others	Capital reserve	shares	income	foreign currency	Specific reserve	Surplus reserve	Retained earnings	Sub-total	interests	equity

I.	Closing balance of the prior period	7,400,803,875.00	-	-	-	6,072,706,510.86	-	-157,971,711.23	-346,519,139.10	53,520,819.76	899,046,022.99	14,170,510,834.74	28,438,616,352.12	1,812,862,865.33	30,251,479,217.45
	Add: Changes in accounting policies	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		Correction of prior errors	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		Others						-	-	-	-	-	-	-	-	-	-	-	-	-	-
II.	Balance at the beginning in current period	7,400,803,875.00	-	-	-	6,072,706,510.86	-	-157,971,711.23	-346,519,139.10	53,520,819.76	899,046,022.99	14,170,510,834.74	28,438,616,352.12	1,812,862,865.33	30,251,479,217.45
III.	Increases/decreases in current period
	(decreases denoted by "-")	-	-	-	-	420,537.88	-	27,225,607.97	57,171,955.24	12,023,927.26	-	334,341,704.05	374,011,777.16	1,066,539.70	375,078,316.86
	(I)	Total comprehensive income	-	-	-	-		-	34,539,857.40	57,171,955.24	-	-	1,215,123,919.62	1,249,663,777.02	10,547,312.40	1,260,211,089.42
	(II)	Capital contributed and reduced by
		shareholders			-	-	-	-	420,537.88	-	-	-	-	-	-	420,537.88	52,838,252.00	53,258,789.88
		1.	Ordinary琀	shares contributed
			by shareholders	-	-	-	-	-	-	-	-	-	-	-	-	52,838,252.00	52,838,252.00
		2.	Capital琀	invested by holders of
			other equity instruments	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		3.	Amount琀		of share-based payments
			included in shareholders' equity	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		4.	Others					-	-	-	-	420,537.88	-	-	-	-	-	-	420,537.88	-	420,537.88
	(III)	Appropriation and use of specific reserve	-	-	-	-	-	-	-	-	12,023,927.26	-	-	12,023,927.26	1,408,055.94	13,431,983.20
		1.	Appropriatiovn琀	of specific reserve	-	-	-	-	-	-	-	-	41,111,170.95	-	-	41,111,170.95	3,538,524.80	44,649,695.75
		2.	Use琀	of specific reserve	-	-	-	-	-	-	-	-	-29,087,243.69	-	-	-29,087,243.69	-2,130,468.86	-31,217,712.55
	(IV) Profit distribution			-	-	-	-	-	-	-	-	-	-	-888,096,465.00	-888,096,465.00	-63,727,080.64	-951,823,545.64
		1.	Appropriation琀	of surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	-
			Including: Statutory reserve fund	-	-	-	-	-	-	-	-	-	-	-	-	-	-
						Discretionary reserve fund	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		2.	Appropriation琀	of general risk provision	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		3.	Distribution to shareholders	-	-	-	-	-	-	-	-	-	-	-888,096,465.00	-888,096,465.00	-59,228,280.64	-947,324,745.64
		4.	Others					-	-	-	-	-	-	-	-	-	-	-	-	-4,498,800.00	-4,498,800.00

10 Chapter

Equity in Changes of Statement Consolidated

2020 June 30 ended months six the For

89 2020 REPORT INTERIM

Unit: RMB

											Six months ended 30 June 2020
										Equity attributable to owners of the Company
												Including:
												Translation
												difference of
						Other equity instruments				Other	the financial						Total
						Preferred	Perpetual			Less: Treasury	comprehensive	statements in					Non-controlling	shareholders'
Items					Share capital	shares	bonds	Others	Capital reserve	shares	income	foreign currency	Specific reserve	Surplus reserve	Retained earnings	Sub-total	interests	equity

(V) Internal transfers of shareholders' equity	-	-	-	-	-	-	-7,314,249.43	-	-	-	7,314,249.43	-	-	-
1.	Capital琀	transferred from capital reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	-
2.	Capital琀	transferred from surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	-
3.	Recovery琀	of losses by surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	-
4.	Transfer琀	of changes in defined benefit
	plans into retained earnings	-	-	-	-	-	-	-	-	-	-	-	-	-	-
5.	Transfer琀	of other comprehensive income
	into retained earnings	-	-	-	-	-	-	-7,314,249.43	-	-	-	7,314,249.43	-	-	-
6.	Others				-	-	-	-	-	-	-	-	-	-	-	-	-	-
IV. Balance at the end in current period	7,400,803,875.00	-	-	-	6,073,127,048.74	-	-130,746,103.26	-289,347,183.86	65,544,747.02	899,046,022.99	14,504,852,538.79	28,812,628,129.28	1,813,929,405.03	30,626,557,534.31

The notes form an integral part of the financial statements.

of Statement Consolidated 2020 June 30 ended months six the For	10 Chapter	LIMITED SINOTRANS 90
Equity in Changes

Unit: RMB

															Six months ended 30 June 2019
														Equity attributable to owners of the Company
																Including:
																Translation
										Other equity instruments				Other	difference of the
										Preferred	Perpetual			Less: Treasury	comprehensive	financial statements					Non-controlling	Total shareholders'
Items								Share capital	shares	bonds	Others	Capital reserve	shares	income	in foreign currency	Specific reserve	Surplus reserve	Retained earnings	Sub-total	interests	equity

I.	Closing balance of the prior period	6,049,166,644.00	-	-	-	4,124,486,665.68	-	-275,001,310.29	-327,135,927.64	41,536,205.81	811,845,310.51	12,484,368,855.91	23,236,402,371.62	4,617,038,534.14	27,853,440,905.76
	Add: Changes in accounting policies	-	-	-	-	-	-	-	-	-	-	-67,948,139.86	-67,948,139.86	-13,083,943.14	-81,032,083.00
		Correction of prior errors	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		Others						-	-	-	-	-	-	-	-	-	-	-	-	-	-
II.	Balance at the beginning in current period	6,049,166,644.00	-	-	-	4,124,486,665.68	-	-275,001,310.29	-327,135,927.64	41,536,205.81	811,845,310.51	12,416,420,716.05	23,168,454,231.76	4,603,954,591.00	27,772,408,822.76
III.	Increases/decreases in current period
	(decreases denoted by "-")	1,351,637,231.00	-	-	-	1,929,894,110.48	-	-3,184,834.58	-57,329,054.64	8,295,572.79	-	555,380,371.61	3,842,022,451.30	-3,294,518,684.91	547,503,766.39
	(I)	Total comprehensive income	-	-	-	-	-	-	-3,184,834.58	-57,329,054.64	-	-	1,517,484,875.36	1,514,300,040.78	70,348,938.09	1,584,648,978.87
	(II) Capital contributed and reduced by
		shareholders			1,351,637,231.00	-	-	-	1,929,894,110.48	-	-	-	-	-	-	3,281,531,341.48	-3,297,679,281.81	-16,147,940.33
		1.	Ordinary琀	shares contributed by
			shareholders		1,351,637,231.00	-	-	-	2,038,565,420.42	-	-	-	-	-	-	3,390,202,651.42	-3,297,679,281.81	92,523,369.61
		2.	Capital琀	invested by holders of other
			equity instruments	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		3.	Amount琀		of share-based payments
			included in shareholders' equity	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		4.	Others					-	-	-	-	-108,671,309.94	-	-	-	-	-	-	-108,671,309.94	-	-108,671,309.94
	(III)	Appropriation and use of specific reserve	-	-	-	-	-	-	-	-	8,295,572.79	-	-	8,295,572.79	763,675.48	9,059,248.27
		1.	Appropriatiovn琀	of specific reserve	-	-	-	-	-	-	-	-	22,913,983.74	-	-	22,913,983.74	1,332,086.41	24,246,070.15
		2.	Use琀	of specific reserve	-	-	-	-	-	-	-	-	-14,618,410.95	-	-	-14,618,410.95	-568,410.93	-15,186,821.88
	(IV) Profit distribution			-	-	-	-	-	-	-	-	-	-	-962,104,503.75	-962,104,503.75	-67,952,016.67	-1,030,056,520.42
		1.	Appropriation琀	of surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	-
			Including: Statutory reserve fund	-	-	-	-	-	-	-	-	-	-	-	-	-	-
						Discretionary reserve fund	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		2.	Appropriation琀	of general risk provision	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		3.	Distribution to shareholders	-	-	-	-	-	-	-	-	-	-	-962,104,503.75	-962,104,503.75	-67,952,016.67	-1,030,056,520.42
		4.	Others					-	-	-	-	-	-	-	-	-	-	-	-	-	-

the For	Statement Consolidated
2020 June 30 ended months six	Equity in Changes of	10 Chapter	91 2020 REPORT INTERIM

Unit: RMB

											Six months ended 30 June 2019
										Equity attributable to owners of the Company
												Including:
												Translation
						Other equity instruments				Other	difference of the
						Preferred	Perpetual			Less: Treasury	comprehensive	financial statements					Non-controlling	Total shareholders'
Items					Share capital	shares	bonds	Others	Capital reserve	shares	income	in foreign currency	Specific reserve	Surplus reserve	Retained earnings	Sub-total	interests	equity

(V) Internal transfers of shareholders' equity	-	-	-	-	-	-	-	-	-	-	-	-	-	-
1.	Capital琀	transferred from capital reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	-
2.	Capital琀	transferred from surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	-
3.	Recovery琀	of losses by surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	-
4.	Transfer琀	of changes in defined benefit
	plans into retained earnings	-	-	-	-	-	-	-	-	-	-	-	-	-	-
5.	Transfer琀	of other comprehensive income
	into retained earnings	-	-	-	-	-	-	-	-	-	-	-	-	-	-
6.	Others				-	-	-	-	-	-	-	-	-	-	-	-	-	-
IV. Balance at the end in current period	7,400,803,875.00	-	-	-	6,054,380,776.16	-	-278,186,144.87	-384,464,982.28	49,831,778.60	811,845,310.51	12,971,801,087.66	27,010,476,683.06	1,309,435,906.09	28,319,912,589.15

The notes form an integral part of the financial statements.

of Statement Consolidated 2020 June 30 ended months six the For	10 Chapter	LIMITED SINOTRANS 92
Equity in Changes

Unit: RMB

												Six months ended 30 June 2020
														Including:
														Translation
														difference of
								Other equity instruments				Other	the financial
								Preferred	Perpetual			Less:	comprehensive	statements in			Retained
Items						Share capital	shares	bonds	Others	Capital reserve	Treasury shares	income	foreign currency	Specific reserve	Surplus reserve	earnings	Sub-total

I.	Closing balance of the prior period	7,400,803,875.00	-	-	-	10,764,008,546.37	-	-12,970,901.77	1,171,815.10	4,080,696.43	899,046,022.99	1,719,921,892.00	20,774,890,131.02
	Add:Changes in accounting policies	-	-	-	-	-	-	-	-	-	-	-	-
		Correction of prior errors	-	-	-	-	-	-	-	-	-	-	-	-
		Others				-	-	-	-	-	-	-	-	-	-	-	-
II.	Balance at the beginning in current period	7,400,803,875.00	-	-	-	10,764,008,546.37	-	-12,970,901.77	1,171,815.10	4,080,696.43	899,046,022.99	1,719,921,892.00	20,774,890,131.02
III.	Increases/decreases in current period
	(decreases denoted by "-")	-	-	-	-	-	-	-156,693.88	-156,693.88	-43,978.07	-	1,230,305,190.89	1,230,104,518.94
	(I)	Total comprehensive income	-	-	-	-	-	-	-156,693.88	-156,693.88	-	-	2,118,401,655.89	2,118,244,962.01
	(II)	Capital琀	contributed and reduced
		by shareholders	-	-	-	-	-	-	-	-	-	-	-	-
		1. Ordinary琀	shares contributed by shareholders	-	-	-	-	-	-	-	-	-	-	-	-
		2. Capital琀	invested by holders of other equity
		instruments		-	-	-	-	-	-	-	-	-	-	-	-
		3. Amount琀		of share-based payments included
		in shareholders' equity	-	-	-	-	-	-	-	-	-	-	-	-
		4. Others				-	-	-	-	-	-	-	-	-	-	-	-
	(III) Appropriation and use of specific reserve	-	-	-	-	-	-	-	-	-43,978.07	-	-	-43,978.07
		1. Appropriation of specific reserve	-	-	-	-	-	-	-	-	-	-	-	-
		2. Use of specific reserve	-	-	-	-	-	-	-	-	-43,978.07	-	-	-43,978.07
	(IV) Profit distribution		-	-	-	-	-	-	-	-	-	-	-888,096,465.00	-888,096,465.00
		1. Appropriation琀	of surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-
		Including:Statutory reserve fund	-	-	-	-	-	-	-	-	-	-	-	-
					Discretionary reserve fund	-	-	-	-	-	-	-	-	-	-	-	-
		2. Appropriation琀	of general risk provision	-	-	-	-	-	-	-	-	-	-	-	-
		3. Distribution to shareholders	-	-	-	-	-	-	-	-	-	-	-888,096,465.00	-888,096,465.00
		4. Others				-	-	-	-	-	-	-	-	-	-	-	-

the For	Equity in Changes of Statement
2020 June 30 ended months six	10 Chapter Company the of

93 2020 REPORT INTERIM

Unit: RMB

									Six months ended 30 June 2020
											Including:
											Translation
											difference of
					Other equity instruments				Other	the financial
					Preferred	Perpetual			Less:	comprehensive	statements in			Retained
Items				Share capital	shares	bonds	Others	Capital reserve	Treasury shares	income	foreign currency	Specific reserve	Surplus reserve	earnings	Sub-total

(V) Internal transfers of shareholders' equity	-	-	-	-	-	-	-	-	-	-	-	-
1. Capital琀	transferred from capital reserve	-	-	-	-	-	-	-	-	-	-	-	-
2. Capital琀	transferred from surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-
3. Recovery琀	of losses by surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-
4. Transfer琀	of changes in defined benefit
plans into retained earnings	-	-	-	-	-	-	-	-	-	-	-	-
5. Transfer琀	of other comprehensive income
into retained earnings	-	-	-	-	-	-	-	-	-	-	-	-
6. Others				-	-	-	-	-	-	-	-	-	-	-	-
IV. Balance at the end in current period	7,400,803,875.00	-	-	-	10,764,008,546.37	-	-13,127,595.65	1,015,121.22	4,036,718.36	899,046,022.99	2,950,227,082.89	22,004,994,649.96

The notes form an integral part of the financial statements.

in Changes of Statement 2020 June 30 ended months six the For	10 Chapter	LIMITED SINOTRANS 94
Company the of Equity

Unit: RMB

											Six months ended 30 June 2019
													Including:
													Translation
													difference of
							Other equity instruments				Other	the financial
							Preferred	Perpetual			Less:	comprehensive	statements in
Items					Share capital	shares	bonds	Others	Capital reserve	Treasury shares	income	foreign currency	Specific reserve	Surplus reserve	Retained earnings	Sub-total

I.	Closing balance of the prior period	6,049,166,644.00	-	-	-	5,113,523,892.31	-	-13,225,231.95	917,484.92	4,439,943.32	811,845,310.51	1,920,223,092.41	13,885,973,650.60
	Add:Changes in accounting policies	-	-	-	-	-	-	-	-	-	-	-23,003,108.98	-23,003,108.98
		Correction of prior errors	-	-	-	-	-	-	-	-	-	-	-	-
		Others				-	-	-	-	-	-	-	-	-	-	-	-
II.	Balance at the beginning in current period	6,049,166,644.00	-	-	-	5,113,523,892.31	-	-13,225,231.95	917,484.92	4,439,943.32	811,845,310.51	1,897,219,983.43	13,862,970,541.62
III.	Increases/decreases琀	in current period
	(decreases denoted by "-")	1,351,637,231.00	-	-	-	5,653,294,465.38	-	-353.74	-353.74	-62,000.16	-	-33,915,827.38	6,970,953,515.10
	(I)	Total comprehensive income	-	-	-	-		-	-353.74	-353.74	-	-	928,188,676.37	928,188,322.63
	(II)	Capital contributed and reduced by shareholders	1,351,637,231.00	-	-	-	5,653,294,465.38	-	-	-	-	-	-	7,004,931,696.38
		1. Ordinary琀	shares contributed by shareholders	1,351,637,231.00	-	-	-	5,730,941,859.44	-	-	-	-	-	-	7,082,579,090.44
		2. Capital琀	invested by holders of other equity
		instruments	-	-	-	-	-	-	-	-	-	-	-	-
		3. Amount琀		of share-based payments included
		in shareholders' equity	-	-	-	-	-	-	-	-	-	-	-	-
		4. Others				-	-	-	-	-77,647,394.06	-	-	-	-	-	-	-77,647,394.06
	(III) Appropriation and use of specific reserve	-	-	-	-	-	-	-	-	-62,000.16	-	-	-62,000.16
		1. Appropriation of specific reserve	-	-	-	-	-	-	-	-	-	-	-	-
		2. Use of specific reserve	-	-	-	-	-	-	-	-	-62,000.16	-	-	-62,000.16
	(IV) Profit distribution		-	-	-	-	-	-	-	-	-	-	-962,104,503.75	-962,104,503.75
		1. Appropriation琀	of surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-
		Including:Statutory reserve fund	-	-	-	-	-	-	-	-	-	-	-	-
				Discretionary reserve fund	-	-	-	-	-	-	-	-	-	-	-	-
		2. Appropriation琀	of general risk provision	-	-	-	-	-	-	-	-	-	-	-	-
		3. Distribution to shareholders	-	-	-	-	-	-	-	-	-	-	-962,104,503.75	-962,104,503.75
		4. Others				-	-	-	-	-	-	-	-	-	-	-	-

10 Chapter Company the of Equity in Changes of Statement 2020 June 30 ended months six the For

95 2020 REPORT INTERIM

Unit: RMB

									Six months ended 30 June 2019
											Including:
											Translation
											difference of
					Other equity instruments				Other	the financial
					Preferred	Perpetual			Less:	comprehensive	statements in
Items				Share capital	shares	bonds	Others	Capital reserve	Treasury shares	income	foreign currency	Specific reserve	Surplus reserve	Retained earnings	Sub-total

(V) Internal transfers of shareholders' equity	-	-	-	-	-	-	-	-	-	-	-	-
1. Capital琀	transferred from capital reserve	-	-	-	-	-	-	-	-	-	-	-	-
2. Capital琀	transferred from surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-
3. Recovery琀	of losses by surplus reserve	-	-	-	-	-	-	-	-	-	-	-	-
4. Transfer琀	of changes in defined benefit plans
into retained earnings	-	-	-	-	-	-	-	-	-	-	-	-
5. Transfer琀	of other comprehensive income into
retained earnings	-	-	-	-	-	-	-	-	-	-	-	-
6. Others				-	-	-	-	-	-	-	-	-	-	-	-
IV. Balance at the end in current period	7,400,803,875.00	-	-	-	10,766,818,357.69	-	-13,225,585.69	917,131.18	4,377,943.16	811,845,310.51	1,863,304,156.05	20,833,924,056.72

The notes form an integral part of the financial statements.

in Changes of Statement 2020 June 30 ended months six the For	10 Chapter	LIMITED SINOTRANS 96
Company the of Equity

INTERIM REPORT 2020

Chapter 10

Notes to the Financial Statements

For the six months ended 30 June 2020 (Unless otherwise indicated, the unit of amount is RMB)

I. GENERAL INFORMATION OF THE COMPANY

Sinotrans Limited (hereinafter referred to as "the Company") is a joint stock limited company established in the People's Republic of China (hereinafter referred to as "PRC") on 20 November 2002, initiated by China National Foreign Trade Transportation (Group) Corporation (hereinafter referred to as "China Foreign Transportation Group Company").

The Company was established with a total capital of 2,624,087,200 shares with a par value of RMB1 per share. On 21 November 2002, the State Economy and Trade Commission made the Approval on the Conversion of Sinotrans Limited into an Overseas Fund-raising Company (GJMQG [2002] No.870), agreed that the Company converted into a company that raised shares overseas and to be listed. On 22 November 2002, according to the Disclosure on the Issuance of Overseas Listed Foreign Capital Shares by Sinotrans Limited (ZJGHZ [2002] No.35), the China Securities Regulatory Commission (hereinafter referred to as "CSRC") agreed the Company to issue no more than 1,787,407,050 overseas listed foreign capital shares (including 233,140,050 over-allotment shares), with a par value of RMB1 per share; the shares issued this time are all ordinary shares, in which the Company issued no more than 1,624,915,500 new shares, and the shareholders sold no more than 162,491,550 Pre-IPO Shares.

In February 2003, the Company completed its initial public offering on the Stock Exchange of Hong Kong (hereinafter referred to as "Hong Kong Stock Exchange"), issuing 1,787,406,000 overseas listed foreign shares (hereinafter referred to as "H-shares"), including 1,624,915,000 newly issued shares and 162,491,000 H-shares allocated by China Foreign Transportation Group Company. So far, the Company's issued capital has increased from 2,624,087,200 shares to 4,249,002,200 shares, including 2,461,596,200 domestic shares and 1,787,406,000 H-shares held by China Foreign Transportation Group Company, accounting for 57.9% and 42.1% of the issued capital respectively.

In 2009, China Foreign Transportation Group Company changed its name to China Foreign Transportation & Changjiang Shipping Group Co., Ltd. (hereinafter referred to as "SINOTRANS & CSC") after merging with China Changjiang National Shipping (Group) Corporation. Since then, the Company has become a subsidiary of SINOTRANS & CSC.

On 11 June 2014, according to the resolution passed by the board of directors and the shareholders' meeting of the Company, approved by the State-owned Assets Supervision and Administration Commission of the State Council (hereinafter referred to as "SASAC") of Approval on Issues Relevant to the Private Issuance of H-share Stocks by Sinotrans Limited (State-owned Assets Right [2014] No.441) and on 9 July 2014, CSRC approved the Approval on Additional Issuance of Overseas Listed Foreign Shares by Sinotrans Limited (Securities Regulatory License [2014] No.688), the Company allocated 357,481,000 H-shares in total to various places, with a par value of RMB1 per share, accounting for 8.41% of the issued capital, the Company's issued capital has increased from 4,249,002,200 shares to 4,606,483,200 shares. Hereby, the registered capital of the Company is changed to RMB4,606,483,200.

98 SINOTRANS LIMITED

Chapter 10

Notes to the Financial Statements

For the six months ended 30 June 2020

(Unless otherwise indicated, the unit of amount is RMB)

I. GENERAL INFORMATION OF THE COMPANY (CONTINUED)

On 29 December 2015, after SASAC reported to the State Council and approved by the State Council, SINOTRANS & CSC and China Merchants Group (hereinafter referred to as "China Merchants") implemented strategic restructuring. SINOTRANS & CSC merged into China Merchants as a whole by means of free transfer, and became its wholly-owned subsidiary. The Company has therefore become a listed subsidiary of China Merchants. Since 1 January 2016, China Merchants has taken control of SINOTRANS & CSC, so China Merchants has become the ultimate holding company of the Company.

On 22 August 2017, the Company entered into an acquisition agreement with China Merchants. Pursuant to the acquisition agreement, the Company agreed to purchase all the shares of the China Merchants Logistics Holding Co., Ltd. (its name was changed as Sinotrans Logistics Co., Ltd. in 2019, hereinafter referred to as "Sinotrans Logistics") held by China Merchants from it, and the total consideration was RMB5,450,000,000, which was paid by issuing 1,442,683,444 domestic shares. On 16 October 2017, the Company's extraordinary general meeting and H-share shareholders' meeting voted to agree the above acquisition. Meanwhile, the related acquisition was approved by the SASAC on 11 October 2017 on the Approval of the Related Issues of Assets Restructuring of Sinotrans Limited (State-owned Assets Right [2017] No.1052), the Company completed the registration and issuance of 1,442,683,444 domestic shares in China Securities Depository and Clearing Co., Ltd. on 3 November 2017, the newly issued shares accounted for 31.32% of issued capital, the Company's issued capital has increased from 4,606,483,200 shares to 6,049,166,644 shares. Hereby, the registered capital of the Company is changed to RMB6,049,166,644.

On 31 May 2018, a motion for the exchange of shares and the consolidation by merger of Sinotrans Air Transportation Development Corporation Limited (hereinafter referred to as "Sinoair") as a subsidiary by the Company was considered and adopted at the Company's extraordinary general meeting and the meeting of class shareholders in 2018, which approved the issuance of A shares by the Company to all the shareholders of Sinoair (excluding the Company) in exchange for the shares of Sinoair held by it. On 1 November 2018, China Securities Regulatory Commission issued an Reply on Approval of the Application of Sinotrans Limited for Consolidation by Merger of Sinotrans Air Transportation Development Co., Ltd. (ZJXK [2018] No. 1772), approving the issuance by the Company of 1,351,637,231 shares for the consolidation by merger of Sinoair. On 10 January 2019, the Company completed the issuance of A shares, and it was officially listed on Shanghai Stock Exchange (hereinafter referred to as "SSE") on 18 January 2019. The registered capital of the Company was changed into RMB7,400,803,875.

The Company belongs to the logistics and transport industry, specifically involving non-vessel transport business (valid until 9 March 2024); domestic waterway transport shipping agency and passenger cargo transport agency business; undertake the international freight forwarding business of marine, land, air import and export goods, international exhibits, private goods and transit goods, etc. Registered address of the Company: A43, Xizhimen Beidajie, Haidian District, Beijing. Legal representative: Li Guanpeng.

INTERIM REPORT 2020

Chapter 10

Notes to the Financial Statements

For the six months ended 30 June 2020 (Unless otherwise indicated, the unit of amount is RMB)

I. GENERAL INFORMATION OF THE COMPANY (CONTINUED)

The Company and its subsidiary (hereinafter referred to as "the Group") are principally engaged in the provision of forwarding and related, logistics, e-commerce and other services. The Group's main business is located in China.

Details of the principal activities of major subsidiaries of the Company are set out in Note VIII "Business Combination and Consolidated Financial Statements".

II. BASIS FOR THE PREPARATION

The Group has evaluated its ability to continue as a going concern for the 12 months from 30 June 2020, including, but not limited to, an assessment for the potential impact of COVID-19, and has not identified any events or circumstances that may cast a significant doubt over its ability to continue as a going concern.

Therefore, the financial statements are prepared on a going concern and accrual basis and are prepared in accordance with the Accounting Standards for Business Enterprises and other relevant regulations issued by the Ministry of Finance (hereinafter referred to as "Accounting Standards for Business Enterprises"), and the relevant disclosures required by the Rules for Compiling Information Disclosure of Public Securities Companies No. 15 - General Provisions on Financial Reporting (revised in 2014) of CSRC and relevant provisions, the disclosure requirements of the Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on Hong Kong Stock Exchange (the "Listing Rules") and based on the accounting policies and accounting estimates as described in the note "IV. Significant Accounting Policies and Accounting Estimates of the Company".

III. STATEMENT OF COMPLIANCE WITH ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES

The financial statements prepared by the Company are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the financial position of the Group and the Company as of 30 June 2020; as well as the consolidated and the Company's operating results and cash flows from January to June 2020.

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Market Closed - Hong Kong S.E. Other stock markets 04:08:35 2024-04-19 am EDT			5-day change	1st Jan Change
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Mar. 25	Transcript : Sinotrans Limited, 2023 Earnings Call, Mar 25, 2024
Mar. 22	Sinotrans Limited Proposes Final Dividend for the Year Ended 31 December 2023, Payable on 31 July 2024	CI

Sinotrans Limited

Equities

598

CNE1000004F1

Air Freight & Logistics

Sinotrans : Interim Report 2020

Latest news about Sinotrans Limited

Chart Sinotrans Limited

Company Profile

Income Statement Evolution

Ratings for Sinotrans Limited

Analysts' Consensus

EPS Revisions

Quarterly revenue - Rate of surprise

Sector Other Air Freight & Logistics

Transcript : Sinotrans Limited, 2023 Earnings Call, Mar 25, 2024	Mar. 24
Sinotrans Limited Proposes Final Dividend for the Year Ended 31 December 2023, Payable on 31 July 2024	Mar. 22	CI
Sinotrans Limited Reports Earnings Results for the Full Year Ended December 31, 2023	Mar. 22	CI
Sinotrans Limited Announces Resignation of Deng Weidong as Non-Executive Director	Mar. 18	CI
Sinotrans Directors Approve Cancelation of 4.5 Million Share Options	Jan. 30	MT
Pony.ai Granted Permit for First Cross-Provincial Self-Driving Truck Trial in China	Jan. 25	MT
Sinotrans Limited Announces the Resignation of Wang Taiwen as Independent Non-Executive Director	Dec. 27	CI
Sinotrans Limited Announces Change in the Registered Address	Nov. 27	CI
Sinotrans Limited Approves Election of Ms. Zhang Zhiyi as the Chairman of the Supervisory Committee	23-10-26	CI
Sinotrans Limited Announces Change of the Staff Representative Supervisor	23-10-20	CI
Sinotrans Limited Reports Earnings Results for the Nine Months Ended September 30, 2023	23-10-10	CI
CMES Unit Receives Fourth 2,400 TEU Container Ship, Expanding Fleet to 30 Ships	23-09-20	MT
Sinotrans Declares Dividend as H1 Attributable Profit Slides	23-08-28	MT
Transcript : Sinotrans Limited, H1 2023 Earnings Call, Aug 28, 2023	23-08-28
Sinotrans Limited Announces Interim Dividend for the Six Months Ended 30 June 2023, Payable on October 19, 2023	23-08-25	CI
Sinotrans Limited Reports Earnings Results for the Half Year Ended June 30, 2023	23-08-25	CI
Sinotrans Limited Announces Management Appointments	23-07-31	CI
Sinotrans Limited Announces Board Changes	23-07-07	CI
Sinotrans Limited's Equity Buyback announced on June 7, 2022, has expired.	23-05-11	CI
Sinotrans Limited Reports Earnings Results for the First Quarter Ended March 31, 2023	23-04-28	CI
Transcript : Sinotrans Limited, 2022 Earnings Call, Mar 28, 2023	23-03-28
Sinotrans Posts 10% Jump in 2022 Profit	23-03-27	MT
Sinotrans Limited Recommends Ordinary Final Dividend for the Year Ended 31 December 2022, Payable on or Before 28 June 2023	23-03-27	CI
Sinotrans Limited Reports Earnings Results for the Full Year Ended December 31, 2022	23-03-27	CI
Sinotrans Repurchases, Cancels Nearly 61 Million Hong Kong Shares	23-02-13	MT

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