C&D International Investment : 2024-04-29 2023 ANNUAL REPORT

CONTENTS

Page

1. CORPORATE INFORMATION

1. CHAIRPERSON'S STATEMENT

10 MANAGEMENT DISCUSSION AND ANALYSIS

22 BIOGRAPHICAL DETAILS OF DIRECTORS AND   SENIOR MANAGEMENT

28 DIRECTORS' REPORT

63 CORPORATE GOVERNANCE REPORT

1. ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

1. INDEPENDENT AUDITOR'S REPORT

175 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND   OTHER COMPREHENSIVE INCOME

1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION

1. CONSOLIDATED STATEMENT OF CASH FLOWS

1. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

1. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. FINANCIAL SUMMARY
2. MAJOR PROPERTIES PORTFOLIO

This annual report is made in English and Chinese. In the case of any inconsistency, the English version shall prevail.

CORPORATE INFORMATION

BOARD OF DIRECTORS

Executive Directors

Ms. ZHAO Chengmin (Chairperson)

Mr. LIN Weiguo (Chief Executive Officer) Mr. TIAN Meitan

Mr. PENG Yong (appointed on 26 April 2023)

Non-executive Directors Mr. HUANG Wenzhou Ms. YE Yanliu

Mr. ZHENG Yongda (appointed on 10 May 2023) Mr. WANG Wenhuai (resigned on 10 May 2023)

Independent Non-executive Directors

Mr. WONG Chi Wai

Mr. WONG Tat Yan, Paul Mr. CHAN Chun Yee

Mr. DAI Yiyi (appointed on 26 April 2023)

COMPANY SECRETARY

Ms. KAM Mei Ha Wendy (FCG, HKFCG)

AUDIT COMMITTEE

Mr. WONG Chi Wai (Committee Chairperson) Mr. WONG Tat Yan, Paul

Mr. CHAN Chun Yee

Mr. DAI Yiyi (appointed on 26 April 2023)

INDEPENDENT AUDITOR

Grant Thornton Hong Kong Limited

PRINCIPAL BANKERS

(in alphabetical order) Agricultural Bank of China Limited Bank of China Limited

Bank of Communications Co., Ltd. China CITIC Bank Corporation Limited China Construction Bank Corporation China Merchants Bank Co., Ltd.

Industrial and Commercial Bank of China Limited Industrial Bank Co., Ltd

Postal Savings Bank of China

REGISTERED OFFICE

Third Floor, Century Yard

Cricket Square, P.O. Box 902

Grand Cayman, KY1-1103

Cayman Islands

PRINCIPAL PLACE OF BUSINESS IN PRC

C&D International Building No.1699 Huandao East Road Xiamen, China (Postcode: 361008)

REMUNERATION COMMITTEE

Mr. WONG Tat Yan, Paul (Committee Chairperson) Mr. WONG Chi Wai

Mr. CHAN Chun Yee

Mr. DAI Yiyi (appointed on 26 April 2023)

NOMINATION COMMITTEE

Ms. ZHAO Chengmin (Committee Chairperson) Mr. CHAN Chun Yee

Mr. WONG Chi Wai

Mr. WONG Tat Yan, Paul

Mr. DAI Yiyi (appointed on 26 April 2023)

HEAD OFFICE AND PRINCIPAL PLACE OF   BUSINESS IN HONG KONG

Office No. 3517

35th Floor, Wu Chung House

213 Queen's Road East

Wanchai, Hong Kong

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CORPORATE INFORMATION

PRINCIPAL SHARE REGISTRAR   AND TRANSFER AGENT

Tricor Services (Cayman Islands) Limited

Third Floor, Century Yard

Cricket Square, P.O. Box 902

Grand Cayman, KY1-1103

Cayman Islands

HONG KONG BRANCH SHARE REGISTRAR   AND TRANSFER OFFICE

Tricor Investor Services Limited

17/F, Far East Finance Centre

16 Harcourt Road, Hong Kong

LEGAL ADVISER AS TO HONG KONG LAWS

King & Wood Mallesons

STOCK CODE

1908

COMPANY'S WEBSITE

www.cndintl.com

(the contents of which do not form part of this annual report)

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CHAIRPERSON'S STATEMENT

Dear Shareholders,

I am pleased to present the annual report of C&D International Investment Group Limited ("C&D International Group" or the "Company", and together with its subsidiaries, the "Group") for the year ended 31 December 2023 (the "Year").

1. REVIEW OF ECONOMIC LANDSCAPE

In 2023, despite the relatively loosen policies in the real estate industry that brought overall benefits to businesses, the external market conditions remained challenging, with insufficient consumer confidence among residents. After an initial surge in the first quarter, the sales of the real estate market in the PRC continued to decline, resulting in an overall contraction in the industry's scale.

From the perspective of the supply side, the industry is experiencing accelerated reshuffling and integration, leading to a more pronounced differentiation among real estate companies and a clearer competitive landscape. Real estate companies with strong comprehensive strengths in terms of product, service, operation and financing capacity, will gradually emerge as competitive leaders.

From the perspective of demand, the livability of real estate had regained importance, as people's preferences shift from "merely owning a house" to "desiring a high-quality house", with emphasis changing from "meeting basic housing needs" to "satisfying the desire for a high-quality living experience", thus putting forward a higher demand for residential space, community environment and supporting services. The demand for improved housing has become a crucial factor in residents' property acquisition decisions.

1. RESULTS AND DIVIDEND

During the Year, the Group achieved operating revenue of approximately RMB134.4 billion (2022: approximately RMB99.6 billion), representing a year-on-year increase of approximately 35%; profit for the Year attributable to the owners of the Group of approximately RMB5.0 billion (2022: approximately RMB4.9 billion), representing a year-on-year increase of approximately 2%.

As of 31 December 2023, the Group's total assets amounted to RMB427.3 billion (year-on-year increase of 9%), of which monetary funds amounted to approximately RMB54.2 billion (year-on-year increase of approximately 8%) and inventories amounted to approximately RMB270.9 billion (year-on-year increase of approximately 5%), both accounting for approximately 76% of the total assets, maintaining a healthy asset structure.

The board (the "Board") of directors of the Company recommends the declaration of a final dividend of HK$1.30 per Share for the Year with scrip dividend election, subject to the approval of the Shareholders at the forthcoming annual general meeting (the "AGM").

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CHAIRPERSON'S STATEMENT

III. BUSINESS REVIEW

In 2023, under the leadership of the Board, the Group consistently upheld a "customer-centric" approach, and remained committed to the sound business logic and value-driven orientation, safeguarding its core business while refining its products and improving its services. We strived to enhance the Group's ability to sustain its survival and growth.

1. Property development business: Strengthen product competitiveness by adopting a customer-oriented approach and achieve quality growth.
2. 1. Adhere to maintaining asset health and liquidity while implementing a strategy of deepening our presence in cities.
      In the face of industry changes, by insisting on the principle of cash flow being a top priority, the Group strengthened sales efforts through aggressive destocking to accelerate return of capital, and achieved quality growth by enhancing internal operational efficiency.
      In 2023, the Group achieved total contracted sales of approximately RMB188.9 billion, representing a year-on-year increase of approximately 12%; attributable contracted sales amounted to approximately RMB138.0 billion, representing a year-on-year increase of approximately 14% and approximately 73% attributable to the Group. The Group's total cash collection from sales was approximately RMB184.3 billion, representing a cash collection ratio of 98%, maintaining high-quality cash collection.
   2. Adhere to a prudent investment strategy and seize opportunities for high-quality land in the market.
      In 2023, focusing on first-tier and second-tier cities with solid foundation for brand establishment as well as cities in Fujian Province with a relative balanced supply and demand, the Group conducted thorough assessments of land value, risk identification and customer positioning, so as to actively seize opportunities for high-quality land in the market through cautious land acquisitions.
      In 2023, the Group acquired 78 new projects with a total acquisition cost amount of RMB116.9 billion and a total project value of approximately RMB218.0 billion. We secured a number of high-quality projects in cities such as Hangzhou, Shanghai, Xiamen, Beijing, and Suzhou. Among them, projects like Hangzhou Yunqi Zhijiang* (杭州雲啟之江), Ningbo Puyun* (寧波璞雲), and Changting Yangxi* (長汀央璽) achieved land acquisition and complete sell-out of the property development within the Year.
      As of 31 December 2023, the salable area of the Group's total land reserves was approximately 15.52 million sq.m., with the land reserves acquired after 2022 accounting for approximately 70%, of which approximately 76% was attributable to the Group. The land reserve structure is of high quality, indicating good overall asset quality.

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CHAIRPERSON'S STATEMENT

1. 1. Committed to building the core competitiveness of our products, achieving a record high in the quantity and quality of new product launches.
      The Group has always been committed to building the core competitiveness of our products by adhering to the positioning of "New Chinese-style" product and making every effort to advance new product research and development as well as launch.
      In 2023, the Group highlighted the distinctive features of our products by integrating modern materials and techniques with the cultural essence of Chinese architecture, and created a new Chinese-style architecture that reflects the characteristics of the current era. We successively launched several new product series such as "Shengshi Tangfeng" (盛世唐風), "Fengya Songyun" (風雅宋韻) and "Shiyi Dongfang" (詩意東方). During the Year, we made significant progress in terms of the quantity, quality and efficiency of our research and development achievements, with 20 product style systematic innovation and development, 14 innovative display areas launching, 8 functional enhancement research and development, and 92 new patents application.
2. Real estate industry chain: pursue synergistic development by leveraging advantages of different sectors and seek new breakthroughs.
   Apart from property development business, the Group's business spans the real estate industry chain, encompassing property management, entrusted construction, construction management, and urban renewal. Each business segment possesses its own competitive advantages while complementing each other, leading to synergistic growth of value.
3. 1. Property management: continuously enhance service capabilities and create high-quality living spaces.
      C&D Property Management Group Co., Ltd ("C&D Property", stock code: 2156) is a listed company on the Main Board of the Stock Exchange engaged in property management under the Group. As of 31 December 2023, C&D Property's contracted GFA of property management service exceeded 100 million sq.m. (reaching approximately 101.8 million sq.m.), representing a year-on-year increase of approximately 12%; the gross floor area ("GFA") under management of property management service was approximately 61.4 million sq.m., representing a year-on-year increase of approximately 33%, serving over 375,000 households. C&D Property has consistently maintained a reputation of high-quality services. In 2023, the property service satisfaction score of FG Consulting (賽惟) was 93, maintaining the industry benchmark level. On the premise of maintaining service reputation, it achieved continuous improvement in management scale.

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CHAIRPERSON'S STATEMENT

1. 2. Construction management: strengthen business synergy and continuously improve service capabilities in engineering, technology and production.

   C&D Holsin Engineering Consulting Co., Ltd. ("C&D Holsin", a company listed on the Shanghai Stock Exchange, stock code: 603909) is an A-share listed company under the Group engaged in construction management. Since the acquisition, C&D Holsin has fully utilized its own advantages and actively integrated into the Group's industrial chain, thus establishing intensive cooperation in the fields of construction, architectural design and construction supervision and achieving business synergy and development in an all-round way. In addition, in respect of the research and development and application of engineering technology, C&D Holsin successfully secured projects such as Xiamen Astronomical Museum (廈門天文館), which is a planetarium with the largest GFA in the world, and Xiamen Third East Passage (廈門第三東通道) in 2023. C&D Holsin's subsidiary, Dalian Municipal Design Institute, won the bid for the main survey and design of the world's largest offshore airport, "Dalian Jinzhou Bay International Airport", achieving breakthroughs in the civil aviation field.

2. Operation management: focus on value creation and improve operational efficiency and effectiveness.
   In 2023, with the goal of jointly promoting business development, the Group enhanced the value creation of the headquarters and strengthened the front-line empowerment; and the rights and responsibilities of each management level were transparent and coordinated to jointly promote the high-quality development of the Company.
   In respect of informationization construction, the Group has been closely following the cutting-edge information technology. Under the guidance of digitalization and intelligence and with a focus on process optimization, we have implemented digitalization in production and operations as well as internal management. We have gradually built an information management system covering property development, property management services, commercial management and other fields. Through digitization, we aim to enhance the efficiency and effectiveness of production and management.
   Leveraging its high-quality fundamentals, the Group received multiple awards in 2023, including the 14th "Hong Kong Listed Company Investor Relations Tianma Award" granted by the Securities Times, the 19th "Best IR Hong Kong Listed Company Award" granted by the New Fortune and being listed in the "China Listed Company Brand Value List - Vitality List" released by the National Business Daily, indicating the further improvement of the Group's influence in the capital market.

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CHAIRPERSON'S STATEMENT

IV. FUTURE DEVELOPMENT PROSPECT

In 2024, despite increased uncertainties in the external environment, the real estate industry remains closely linked to people's aspirations for a better life, offering vast and sustainable business opportunities. It also provides a broad market for quality real estate enterprises. In the face of competition and challenges, the Group will stay true to its original mission, uphold a "customer-centric" approach, pursue profitability and operational cash flow, maintain liquidity, ensure secure operations, and continue to promote quality growth.

1. Continue to maintain sound liquidity and strengthen policy trend analysis to seize market opportunity windows.
   The Group will firmly give top priority to the health of our assets, keep a close eye on cash flow management and maintain liquidity. We will focus our investments to minimize risk and insist on ploughing into high-powered cities with stable long-term demand, giving priority to first- and second-tier cities as well as third- and fourth-tier cities with strong brand influence. The Group will enhance research on policies and markets by establishing a dynamic tracking mechanism, so as to improve its understanding of markets in cities.
2. Enhance product and service competitiveness by unwaveringly adopting a customer- oriented approach, and fully develop new Chinese-style products.
   The Group will steadfastly develop new Chinese-style products, and consistently develop improved products through keeping pace with technological advancements as well as strengthening, accelerating and intensifying innovation and research and development on product upgrades. New technologies will be utilized to create a residential system with features of "healthy living + green and low-carbon + smart homes". More efforts will be made to the research and development of new materials and processes, with the aim of creating a "Lighthouse Project" through active innovation.
3. Continue to deepen lean management to enhance the efficiency and effectiveness of production and operation.
   The Group will continue to expedite the construction of its digital platforms, and establish rules for resource allocation, operational efficiency, process optimization, and internal control. By utilizing digital means to guide our operations, we will enhance the ability to provide early warning and control of management, support precise decision-making and promote refined management, so as to actively improve the efficiency and effectiveness of production and operation.
   In 2024, the Group will actively adapt to national policies and directions, flexibly respond to market conditions, and make timely adjustments. We will pursue differentiation, rely on product strength, bring happiness to customers, and strive for further breakthroughs to achieve long-term, sustainable and high-quality development, so as to continue to create greater value for customers, the Shareholders and the society.

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CHAIRPERSON'S STATEMENT

APPRECIATION

I would like to take this opportunity to express my sincere gratitude to the members of the Board and all the staff for their dedication. I would also like to extend my heartfelt appreciation to the Shareholders and business partners for their support and trust. I salute and thank all the hardworking individuals within the Group, who have persevered because of their original aspirations and dreams, never giving up and relentlessly pursuing with strong determination. It is their unwavering will and collective efforts that have become ingrained in our beliefs and continue to drive us forward!

C&D International Investment Group Limited

Zhao Chengmin

Chairperson and Executive Director

Hong Kong, 21 March 2024

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