INTERIM REPORT 2020

Contents

  1. Corporate Profile
  2. Interim Results
  3. Management Discussion and Analysis
  1. Corporate Governance
  1. Other Information
  1. Independent Review Report
  2. Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
  3. Interim Condensed Consolidated Statement of Financial Position
  1. Interim Condensed Consolidated Statement of Changes in Equity
  2. Interim Condensed Consolidated Statement of Cash Flows
  3. Notes to Interim Condensed Consolidated

Financial Information

65 Glossary

67 Corporate Information

2

CORPORATE

PROFILE

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

Jilin Province Chuncheng Heating Company Limited* (吉林省春城熱力股份有限公司) (the "Company", together with its subsidiaries, the "Group") was established in Changchun City, Jilin Province, the People's Republic of China (the "PRC") on 23 October 2017. Heat supply is the Group's core business. Over two decades' operating history of heat supply enabled the Group to accumulate extensive experience and gradually consolidate its leading position in the industry. The Company transmits heat to the main municipal areas in Changchun using the cogeneration technology, the best heat supply mode in the industry which is energy-saving, efficient and environmentally-friendly. During the Reporting Period, the on-grid heat service area of the Group in Changchun amounted to approximately 42.73 million sq.m. and the Group is responsible for the provision of heat supply services for approximately 350,000 residential and non-residential users in Changchun.

Apart from heat supply business, leveraging on its integration of the heat supply industry chain, high level of engineering construction qualifications and industry permits, excellent driving force and remarkable reputation, the Group has extended the coverage of its engineering construction, equipment maintenance and repair and heat supply industry design services to the entire Northeast region, effectively enhanced the production and service standards of heat supply enterprises in the Northeast region and strengthened the Group's brand influence in the industry.

In the face of new opportunities and challenges, the Group will continue to focus on its principal heating business, build up momentum for future development, prepare its visionary and ambitious blueprint, create momentum for development through collaboration and innovation, ensure people's livelihood through reform and practice, reward shareholders and serve the community with stable growth in performance and favourable development.

3

INTERIM

RESULTS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

The board of directors (the "Board") of Jilin Province Chuncheng Heating Company Limited (the "Company", "we", "us", or "our") hereby announces the unaudited operating results of the Company and its subsidiaries (together, the "Group") for the six months ended 30 June 2020 (the "Reporting Period"), together with comparative figures for corresponding period in 2019. For the six months ended 30 June 2020, the Group's revenue was RMB629.6 million, representing a decrease of 5.0% as compared with the corresponding period in 2019; profit before tax was RMB121.5 million, representing an increase of 5.2% over the corresponding period in 2019; profit attributable to owners of the Company was RMB89.6 million, representing an increase of 6.7% over the corresponding period in 2019; earnings per share was RMB0.19, representing a decrease of RMB0.05 over the corresponding period in 2019.

4

MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

In the first half of 2020, amidst the severe challenges posed by the COVID-19 pandemic and the complex and ever-changing domestic and international environment, the whole country holistically advanced various works concerning the prevention and control of COVID-19 pandemic as well as economic and social development and resolutely implemented various decisions and deployments under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at the core. While implementing stringent anti-epidemic measures against the COVID-19 pandemic, the Company adhered to the principle of quality and efficiency-focused and reform and innovation-driven development, and continued to enhance its modernized corporate governance, increased investment for heat supply technology innovation, and broadened the channels for nurturing talents in the field of heat supply, and all these enabled the Group to maintain its leading position in the heat supply industry in Jilin Province.

  1. BUSINESS REVIEW

In the first half of 2020, the Group has always focused on enhancing its overall strength and vigorously promoted technological innovation. Under the proper leadership of the Group's Party Committee and the Board of Directors, the quality of our heating services improved steadily while the construction, maintenance and design business progressed simultaneously. The Group also achieved remarkable results in mergers and acquisitions within the industry, and its overall operating results grew steadily as compared to the corresponding period in the previous year.

  1. Heat Supply Business

Heat supply is the Group's core business. Over two decades' operating history of heat supply enabled the Group to accumulate extensive experience in the heating industry and establish its leading position in the industry. In the first half of 2020, the Group continued to strengthen the operation, maintenance and management of its heat supply facilities, with various operational indicators showing steady improvement. The Group also carried out its heating business precisely and efficiently under the clean heating model of co-generation, fully leveraging the advantages of the smart heat supply network system.

As at 30 June 2020, the heat service area of the Group (including Xixing Energy) was approximately

42.73 million sq.m. (of which 3.23 million sq.m. were serviced by Xixing Energy), representing an increase of 4.38 million sq.m. from 38.35 million sq.m. for the corresponding period in 2019. As at 30 June 2020, the Group (including Xixing Energy) had 348,570 heat supply users (28,237 of which were serviced by Xixing Energy), representing an increase of 41,604 users from 306,966 users for the corresponding period in 2019. From 1 January 2020 to 30 June 2020, the revenue of the Group from heat supply business amounted to RMB555.6 million, representing an increase of approximately RMB22.6 million, or 4.2%, from RMB533.0 million for the corresponding period in 2019.

5

MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

Company

Customers

Customers of our heating business are generally residential and non-residential users within the Company's heat service area. The table below sets out a breakdown of the number of, and revenue contribution by, residential and non-residential users for the six months ended 30 June 2020.

As at 30 June 2020

As at 30 June 2019

Number of

% of revenue

Number of

% of revenue

customers

from heat supply

customers

from heat supply

Residential users(1)

285,146

66.0%

270,130

66.9%

Non-residential users(2)

35,187

34.0%

36,836

33.1%

Total

320,333

100%

306,966

100%

Notes:

  1. The number of residential users is per household.
  2. Non-residentialusers include commercial users and other users which primarily include industrial users, corporate users and underground car park users, etc.

Heat procurement

In 2020, the Company continued its operation of clean heating through cogeneration and provided heat supply service covering an area of 39.5 million sq.m. in Changchun. Heat source of the Company was entirely from three local cogeneration plants, in particular, our primary pipelines are the only primary heat supply pipelines connecting No.4 Cogeneration Plant and No.5 Cogeneration Plant with the inner urban areas of Changchun. Through the integrated heat distribution network and effective control under the smart heating network system, the heat efficiency and safety of the Company have been further improved, and we are able to control the distribution of heat purchased to a certain extent, thus taking proactive initiatives in the heating market of Changchun. Currently, the heat purchased from the cogeneration plants is able to meet all of the Company's needs for its heat supply business.

According to the relevant documents issued by Changchun Municipal Development and Reform Commission, the heat procurement price was RMB34/GJ (9% VAT included) for January to June 2020. As at 30 June 2020, the total heat procurement by the Group amounted to 12.56 million GJ with heat procurement cost amounted to RMB410.1 million, and 8.14 million GJ of heat was used for the Company's heat production purpose.

6

MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

Heat transmission

For the six months ended 30 June 2020, approximately 4.4 million GJ of the heat procurement quota the Company obtained from the cogeneration plants was transferred to four other heat service providers. We received a total heat transmission fee of RMB13.4 million, representing an increase of 134.9% from the corresponding period in 2019. Heat supply procured from the cogeneration plants is first used to satisfy our own needs for heat supply.

The following table sets forth the breakdown of the usage of the Company heat procurement from January to June 2020 and the corresponding period in 2019:

As at 30 June

2020

2019

Estimated heat procurement quota (GJ)(1)

14,180,000

12,190,000

Heat procurement quota transferred (GJ)(2)

4,418,099

2,947,777

Actual consumption (GJ)(3)

8,139,573

8,535,346

Total heat procured(4)

12,557,672

11,483,123

Utilization rate (%)(5)

57.4%

70.0%

Heat service area (million sq.m.)(6)

39.50

38.35

Notes:

  1. The heat procurement quota was an estimate of the heat procurement prior to each heat supply period based on the historical heat procurement amount.
  2. During the Reporting Period, we transferred certain portion of procured heat to four other heat service providers. We charged heat transmission fees accordingly.
  3. Actual consumption of our heat procured represents the aggregate amount of actual supply and consumption data each month as recorded by the measuring equipment and reviewed and agreed by each of three local cogeneration plants and us.
  4. The total heat procured was the sum of heat procurement quota transferred and the actual consumption. Procurement of heat exceeding the estimated heat procurement quota is subject to supplemental agreements between the cogeneration plants and us. Starting from the heat supply period of 2019-2020, the ex-factory price of heat supply of the cogeneration enterprises has been adjusted to RMB34/GJ (9% VAT included), and the price mechanism negotiated between the heat generation enterprises and the heat supply enterprises has been cancelled.
  5. Utilization rate of heat procurement is calculated as to the actual consumption divided by estimated heat procurement quota.
  6. Gross floor areas covered by heat supply include both the heat service area which we fully and partially charge for our heat fees.

7

MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

Smart heat supply network system

In the first half of 2020, the Company strongly supported technological innovation and was committed to continuously improving the level of heat production automation and electrification, and continued to lead the heat supply industry in the application of advanced technology. In the area of the construction of smart heat network system, the Company is mainly exploring the following directions:

  1. Big data system for smart heat supply
    1. Establishing a multi-dimensional heat supply data warehouse and a data middle-platform system supported by multi-computational methods to achieve cross-system data correlation, enhance computational and statistical capabilities, and optimize results of analysis; providing supporting services to meet the needs of various departments of the Group and avoiding duplication of construction in the future;
    2. Integrating the three elements of heat production, management and service, establishing correlation, relational and regression models tailored for the heating business, analyzing the non-linear interrelationship of data, and realizing various trend predictions, anomaly detection and prediction, behavioral personas for heat supply, revenue and loss attribution analysis, etc., such that the system operation supports fundamental corporate behavior and the data value supports decision optimization and strategic direction;
    3. Realizing smart heating supported by artificial intelligence. Establishing the most robust computational power for heat supply, making dynamic and responsive decisions and commands based on natural factors, factors affecting user demand, and changes in the production system to realize the linkage across heat supply elements, and realizing on-demand heat supply for users with professional support on the premise of maximizing energy saving and environmental protection.
  3. 3D pipeline map
    1. Creating a virtual reality 3D digital piping system outlining all heat supply elements, including heat sources, distribution pipeline network, various types of heat exchange stations, distribution pipeline network stations, and user access equipment. In addition to describing the static physical properties of the elements, it will also describe the dynamic properties associated with heat supply;
    2. The existing system to be interfaced with the 3D digital pipeline system to realize the digital sandbox for heating command, which would allow scenario-based observation over the operation of heat supply elements and make decisions and formulate detailed command plans accordingly;
    3. The utilization of the 3D digital pipeline system as the entrance to each system, to perform scenario-based and qualitative check and review on the system feedback data, and also to perform drill down to achieve data traceability on a quantitative basis, so as to achieve the integration of the various systems.

8

MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

Heat supply emergency repair

The Company has always attached great importance to the quality of its heat supply services, while striving to optimize user experience, the Group has adopted a "zero tolerance" attitude towards the failure of heat supply facilities. In order to improve the efficiency of emergency repair of heat supply facilities, the Group introduced reforms to the emergency repair mechanism, improved the equipment level of the Pipeline Company, and carried out repairs and maintenance in strict compliance with the heat supply emergency repair plan and procedures. In the first half of 2020, the Company basically eliminated heat supply interruptions caused by failures of heat supply facilities.

Technological achievements

The Company, with cogeneration as its backbone, continues to embrace new production and operation ideas, commits to the research and development of technology in the heating industry, enhances the application of technological advancement in the heating industry, and gradually advances towards precise fine-tuning and exact heat supply. In the first half of 2020, the Group was granted a total of 50 patents and software copyrights, covering various areas such as heat supply equipment modification and upgrade, process construction and modification, monitoring and control over heat supply operation, industrial design, and enhancement of office automation.

Meanwhile, the Company also developed 6 software systems to enhance information management and conducted 4 optimization designs and studies, namely "Optimization design study of fixed abutment structure of directly-buried heat supply pipelines", "Optimization design and experimental study of built-in heat supply pipeline support and back anchor nodes in pipeline corridor", "Design and experimental study of pre-set wireless signal transmission device in underground well chamber", "Research on new sealing materials for gaps created by PE-RT II pipeline passing through wall"; 1 research and development project, namely "Research and development of heat supply equipment with heat storage function based on solar energy and peak-to-valley power"; 1 technology retrofit for the implementation of "Energy conservation retrofit for circulating pump"; 3 technological innovations for the implementation of "An online flushing device to change the direction of fluid in a plate heat exchanger", "Primary water mixing System based on distributed pumps" and "Remote patch and plug-in return water temperature collector", all of the above represent encouraging and remarkable achievements.

Xixing Energy

On 8 June 2020, the Group entered into an equity transfer agreement with Changchun FAWSN Group Co., Ltd. (長春一汽富晟集團有限公司) ("Changchun FAWSN") for the acquisition of 50% equity interest in Xixing Energy held by Changchun FAWSN. The equity transfer price paid by the Group amounted to RMB52.0 million. For details, please refer to the announcements of the Company dated 8 June 2020 and 11 June 2020. Upon completion of the transaction, the Group holds 100% equity interest in Xixing Energy and Xixing Energy has become a wholly-owned subsidiary of the Group. After the completion of the merger and acquisition, the Group's heat service area increased by approximately 8.1% and the number of users increased by approximately 8.8%, which is of great significance to the Group's expansion of its heat service area coverage and enhancement of its brand image.

As at 30 June 2020, the heat service area of Xixing Energy was 3.23 million sq.m., with a total of 28,237 users, of which 24,653 were residential users and 3,584 were non-residential users. In the first half of 2020 (January to April), Xixing Energy supplied a total of 0.54 million GJ of heat to its heat service area, of which 0.35 million GJ was generated by its own heat production and 0.19 million GJ was purchased from third party.

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MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

  1. Construction, Maintenance and Design Services

The Group's construction, maintenance and design services cover the peripheral services business of the heat supply industry chain. Our main services include engineering construction, engineering maintenance, design services and electrical and instrument maintenance. These services mainly cover Northeast China. For the six months ended 30 June 2020, revenue generated from the Group's construction, maintenance and design services amounted to RMB74.0 million, representing a decrease of RMB55.7 million, or 42.9%, from RMB129.7 million for the corresponding period in 2019.

  1. Engineering construction

    1. For the six months ended 30 June 2020, revenue generated from engineering construction amounted to RMB23.2 million, representing a decrease of RMB61.3 million, or 72.6%, from RMB84.5 million for the corresponding period in 2019. This was mainly due to no new large-scale projects were undertaken during the period, resulting in a relatively lower volume of projects undertaken in the first half of 2020 as compared to the corresponding period in 2019.
      In the first half of 2020, our engineering construction business was mainly focused on the following:
    2. preparing for bidding, procurement of raw materials and initial design of projects for potential projects, so as to be well prepared for more market opportunities and challenges ahead; (2) making reasonable arrangements for the progress of "Three Supplies and Property Management (三供 一業)" projects and completing the closeout for those projects with excellent quality and quantity assurance; (3) enhancing team building, optimizing management efficiency, taking advantage of the seasonal decrease in project volume in spring to strengthen the sorting and classification of basic data such as settlements and statistics, so as to improve the efficiency of the closeout of construction projects.
  3. Engineering maintenance

  4. For the six months ended 30 June 2020, revenue generated from engineering maintenance amounted to RMB46.6 million, representing an increase of RMB8.5 million, or 22.3%, from RMB38.1 million for the corresponding period in 2019. This was mainly due to the addition of "Three Supplies and Property Management" projects.
    In the first half of 2020, our engineering maintenance business was mainly focused on the following: (1) steadily advancing the construction progress of the "Three Supplies and Property Management" projects in a number of cities in Jilin Province to ensure that the engineering maintenance work would be completed within the required time frame and in accordance with the task planning; (2) maintaining the volume of engineering maintenance business in Changchun and optimizing the engineering maintenance business model by leveraging the scale our heat supply business; (3) expanding and broadening our revenue channels in a multi-dimensional manner by tapping into new businesses such as cleaning services, sales of crystal products and entrusted services of operation and maintenance, which will open up new directions for the future development of the engineering maintenance business.

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MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

  1. 3. Design services

    1. For the six months ended 30 June 2020, revenue generated from design services amounted to RMB3.4 million, remained at a similar level as compared with RMB3.4 million for the corresponding period in 2019.

      In the first half of 2020, the engineering design business was mainly focused on the following:

    2. the addition of new design service agreements, the number of which remained at a similar level with the corresponding period last year, and the volume of business remained stable amid the COVID-19 pandemic; (2) further increasing efforts and investment in technological innovation and research and development projects, with two new utility model patents and two new software copyrights granted in the first half of 2020, laying a solid foundation for the development direction of technological innovation and research and development; (3) carrying out school-enterprise cooperation projects with universities and higher education institutions. Our design service team has cooperated with Jilin University and Changchun Institute of Technology in a number of research projects to continue to facilitate the Group's transformation into an innovative modern enterprise with the latest results of intelligent technology research.
  2. Safety Management

In the first half of 2020, during the special period of epidemic prevention and control, the Group has always focused on "fighting epidemic", "maintaining heat supply" and "preventing accidents", and has comprehensively strengthened its safety management efforts without any slackening or compromise, ensuring the safe and stable operation of the Group's various production operations while effectively safeguarding the personal safety of its employees. The Group strictly adhered to its production safety accountability system, continuously improved its production safety management model, launched specific safety improvement activities, investigated potential safety hazards in product level by level, and focused on safety control in key areas and important links. The Group has comprehensively strengthened safety education and emergency drills and training during non-heat supply periods to enhance the safety precautions and emergency awareness of its staff and effectively enhanced the safety management level of the Group. During the Reporting Period, the Group did not encounter any major safety incidents.

  1. FINANCIAL POSITION AND OPERATING RESULTS
  1. Revenue

For the six months ended 30 June 2020, the Group's revenue decreased by 5.0% to RMB629.6 million as compared with RMB662.7 million for the corresponding period in 2019, primarily due to the decline in the Group's revenue from its construction, maintenance and design business. (i) For the six months ended 30 June 2020, revenue of heat supply business increased by 4.2% to RMB555.6 million as compared with RMB533.0 million for the corresponding period in 2019, primarily attributable to the increase in heat service area of the Group during the period; (ii) for the six months ended 30 June 2020, revenue of construction, maintenance and design business decreased by 42.9% to RMB74.0 million as compared with RMB129.7 million for the corresponding period in 2019, mainly due to the fact that the construction, maintenance and design segment did not undertake any new large-scale projects during the period, resulting in a relatively lower volume of projects undertaken in the first half of 2020 as compared to the corresponding period in 2019.

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MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

The respective segment revenue of the Group is set out as follows:

For the six months end 30 June

Percentage

2020

2019

of change

RMB'000

RMB'000

Heat supply, of which:

515,555

- Provision and distribution of heat

500,763

3.0%

- Pipeline connection fee

27,707

27,002

2.6%

- Heat transmission

12,296

5,189

137.0%

Subtotal

555,558

532,954

4.2%

Construction, maintenance and design

services, of which:

23,169

- Engineering construction

84,549

-72.6%

- Engineering maintenance

46,642

38,140

22.3%

- Design services

3,448

3,408

1.2%

- Others

779

3,641

-78.6%

Subtotal

74,038

129,738

-42.9%

Total

629,596

662,692

-5.0%

  1. Other Income and Other Gains, Net

For the six months ended 30 June 2020, the Group's other income and other gains, net increased by 69.4% to RMB8.3 million as compared with RMB4.9 million for the corresponding period in 2019, primarily due to (i) an exchange gain of RMB2.6 million recognized for the six months ended 30 June 2020 as a result of the proceeds from the Company's Listing in October 2019 and the appreciation of HKD against RMB which led to an increase in exchange gain; (ii) loss on a previously held equity interest remeasured at fair value on the acquisition date with the amount of RMB4.3 million, mainly due to the acquisition of Xixing Energy during the period; (iii) interest income on bank deposits of RMB6.4 million recognized for the six months ended 30 June 2020, representing an increase of 64.1% as compared to RMB3.9 million for the corresponding period in 2019. The increase in interest income was attributable to the increase in bank deposits as a result of the proceeds from the Company's Listing in October 2019.

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MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

  1. Cost of Sales

For the six months ended 30 June 2020, the Group's cost of sales decreased by 7.2% to RMB478.1 million as compared with RMB515.2 million for the corresponding period in 2019. The following table sets out a breakdown of the cost of sales by business segment:

For the six months end 30 June

Percentage

2020

2019

of change

RMB'000

RMB'000

Cost of sales by business segment

415,399

Heat supply

406,007

2.3%

Construction, maintenance and design

services

62,744

109,178

-42.5%

Total

478,143

515,185

-7.2%

Heat supply costs

Cost of sales for heat supply business primarily consists of heat procurement costs in connection with heat procurement from the local cogeneration plants, maintenance and repair, labor cost which primarily includes wages, salaries and benefits for our employees involved in provision and distribution of heat and utility cost.

The breakdown of cost of sales by component for the heat supply business is as follows:

For the six months end 30 June

Percentage

2020

2019

of change

RMB'000

RMB'000

Cost of sales for heat supply

252,977

Heat procurement cost

245,346

3.1%

Maintenance and repair

20,426

16,450

24.2%

Labor

42,450

41,664

1.9%

Depreciation and amortization

42,901

43,579

-1.6%

Utility

31,092

29,657

4.8%

Input VAT transferred out

19,651

22,868

-14.1%

Others

5,902

6,443

-8.4%

Total

415,399

406,007

2.3%

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MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

For the six months ended 30 June 2020, the Group's heat procurement cost increased by 3.1% to RMB253.0 million as compared with RMB245.3 million for the corresponding period in 2019, primarily due to an increase in the heat service area and the costs of heat procurement from cogeneration plants in 2020.

For the six months ended 30 June 2020, the Group's maintenance and repair costs increased by 24.2% to RMB20.4 million as compared with RMB16.5 million for the corresponding period in 2019, primarily due to the addition of the "Balancing Heating Between Homes" project during the current period.

For the six months ended 30 June 2020, the Group's input VAT transferred out decreased by 14.1% to RMB19.7 million as compared with RMB22.9 million for the corresponding period in 2019, primarily due to the increase in the proportion of income not exempt from tax to all income for the current period as compared to the corresponding period in 2019.

Costs of construction, maintenance and design services

Cost of sales for construction, maintenance and design services primarily consists of cost of materials, labor, machinery and other costs. For the six months ended 30 June 2020, the cost of sales for construction, maintenance and design services decreased by 42.5% to RMB62.7 million as compared with RMB109.2 million for the corresponding period in 2019. The change in cost of this business was generally in line with the decrease in revenue from construction, maintenance and design services.

  1. Gross Profit and Gross Profit Margin

For the six months ended 30 June 2020, the Group's gross profit increased by 2.7% to RMB151.5 million as compared with RMB147.5 million for the corresponding period in 2019, mainly due to the steady increase in gross profit as the Company's heating business grew in line with the increase in its heat service area.

  1. Administrative Expenses

For the six months ended 30 June 2020, the Group's administrative expenses increased by 8.3% to RMB44.3 million as compared with RMB40.9 million for the corresponding period in 2019, primarily due to increase in administrative expenses as a result of the addition of required management personnel upon Listing for management purposes.

  1. Finance Costs

For the six months ended 30 June 2020, the Group's finance costs decreased by 81.8% to RMB0.8 million as compared with RMB4.4 million for the corresponding period in 2019, primarily due to the loan repayment of the Group in the second half of 2019.

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MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

  1. Share of Profits and Losses of a Joint Venture

On 11 June 2020 (the acquisition date), the Company acquired Xixing Energy, a joint venture, for which investment gain of RMB1.4 million was recognized for January to May 2020, an increase of RMB3.1 million over the corresponding period in 2019, with the recognition of profit for January to May 2020 resulting from the heating income generated during the heating period from January to April 2020.

  1. Income Tax Expense

For the six months ended 30 June 2020, the Group's income tax expense increased by 1.3% to RMB31.9 million as compared with RMB31.5 million for the corresponding period in 2019, mainly due to the increase in taxable income as calculated in accordance with the Enterprise Income Tax Law and its relevant regulations.

  1. Profit for the Period

For the six months ended 30 June 2020, the Group's profit for the period increased by 6.7% to RMB89.6 million as compared with RMB84.0 million for the corresponding period in 2019. The increase in net profit of RMB5.6 million as compared to the corresponding period of 2019, was due to an increase in gross profit margin of the heating business despite the slight decrease in revenue and costs.

(10) Profit Attributable to the Owners of the Company

For the six months ended 30 June 2020, the Group's profit attributable to the owners of the Company increased by 6.7% to RMB89.6 million as compared with RMB84.0 million for the corresponding period in 2019. As the consolidated subsidiaries of the Group are wholly-owned by the Company, the profit attributable to the owners of the Company was consistent with the profit for the period.

(11) Liquidity and Capital Resources

The Group's cash and cash equivalents decreased by 36.9% to RMB441.5 million as at 30 June 2020 as compared with the balance of RMB699.9 million as at 31 December 2019, primarily due to (i) cash payments of RMB234.1 million for goods and services, resulting in a net cash outflow from operating activities of RMB282.7 million; (ii) payments for purchases of fixed assets and acquisition of a subsidiary during the period, resulting in a net cash outflow from investing activities of RMB37.6 million; and (iii) new borrowings of RMB70.1 million and dividend payments of RMB4.7 million during the period, resulting in a cash inflow from financing activities of RMB59.2 million.

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MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

(12) Capital Expenditure

The Group's capital expenditure decreased by 14.9% to RMB7.4 million for the six months ended 30 June 2020 as compared with RMB8.7 million for the corresponding period in 2019. The capital expenditure is mainly due to the purchase of property, plant and equipment.

(13) Capital Structure

As at 30 June 2020, the equity attributable to owners of the Company increased by RMB10.2 million to RMB850.7 million as compared to 31 December 2019, primarily due to the declaration of the final dividend for the year 2019 during the year and the increase in net profit for the current period. As at 30 June 2020, the Group had interest-bearing bank and other borrowings amounting to approximately RMB80.8 million with fixed interest rates ranging from 4.02% to 4.35% per annum.

Gearing ratio represents the percentage of total interest-bearing liabilities (comprises interest-bearing bank and other borrowings and lease liabilities) at the end of each financial period (after deduction of cash and cash equivalents) over total equity. As at 30 June 2020, the Group's cash and cash equivalents exceeded its total interest-bearing liabilities.

(14) Material Acquisitions and Disposals

On 8 June 2020, the Group entered into an equity transfer agreement with Changchun FAWSN Group Co., Ltd.* (長春一汽富晟集團有限公司) ("Changchun FAWSN") to acquire a 50% equity interest in Xixing Energy held by Changchun FAWSN. The Group settled the consideration of RMB52.0 million for the equity transfer. The Group held 100% equity interest in Xixing Energy and Xixing Energy became a wholly-owned subsidiary of the Group upon completion of the transaction. For details, please refer to the announcements of the Company dated 8 June 2020 and 11 June 2020.

(15) Pledge of Assets

As at 30 June 2020, the Group did not have any charge on its assets.

(16) Contingent Liabilities

As at 30 June 2020, the Group did not have any material contingent liabilities.

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MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

  1. RISK FACTORS AND RISK MANAGEMENT
  1. Industry Risk

The pricing of heat sources in the heat supply industry is usually subject to regulation and control by government departments, and the heat supply enterprises cannot have the right to regulate the purchase price of heat sources directly. In addition, the prices of services provided by the Group's engineering construction, maintenance and design business are also subject to control and regulation under government policies. Therefore, the Group's operations may be affected by adjustments to relevant laws and regulations as well as local policies in the PRC.

The Group will continue to exercise effective cost control, strengthen internal supervision and control as well as enhance its ability to respond timely to market changes so as to achieve a people-oriented and demand-driven heat supply system. The Group will also strive to enhance its intelligent management capability to ensure the quality of heat supply services in order to cope with various industry risks.

  1. Policy Risk

Changes in national and local government policies have a profound impact on the industry. From the perspective of national policies, the development of environmentally friendly, energy-saving and sustainable green cities will become the trend of urban heat supply in the future. In recent years, the PRC government has attached great importance to the monitoring of environmental protection issues by laws and regulations, and has issued a series of environmental protection policies and imposed further restrictions and requirements targeting pollution issues in relevant industries.

In formulating its future development goals and directions, the Group will adhere to the principles and requirements set out in various national and local government economic policies, industrial policies, as well as laws and regulations.

  1. Climate Risk

The cost of heating for the heat supply segment is significantly affected by the weather conditions during the heating period. The Company needs to purchase more heat to maintain the desired in-room temperature for its customers when the outdoor temperature is low during the heating period, which will increase the overall cost of the heating business and vice versa.

The Group will fully leverage the smart heating network system to regulate its heat supply capacity and adopt an intelligent control system for rational distribution of heat supply in order to cope with the risk of climate change on the Company's cost structure.

  1. Exchange Risk

The Group's business activities are mainly conducted in the PRC and its borrowings are also settled in RMB. Changes in exchange rates do not have a material effect on the Group.

IV. PROSPECTS AND OUTLOOK

In 2020, while implementing stringent anti-epidemic measures amid the COVID-19 pandemic, the Group will continue to develop its heat supply business, leverage its advantages in the industrial chain, maintain its steadfast approach in leading industry development with new development concepts, focus on scientific and technological innovation, technological upgrade and clean energy development. The Group will also strive to enhance its innovation and leadership and expand its assets scale to consolidate its leading position in the industry and achieve outstanding results for the sustainable development of the Company.

17

MANAGEMENT

DISCUSSION AND ANALYSIS

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

  1. Prospects of the Heat Supply Business

In recent years, the PRC government has been proactively carrying out reform of the heat supply system. Large local enterprises are encouraged to facilitate the consolidation of the heat supply industry. As the largest heat supply company in Jilin Province, the Group will make full use of the service coverage in its heat supply business, facilitate industrial consolidation and expand the scale of its core businesses, improve the quality of heating and service in order to further secure its leading position in the industry.

The Group will continue to actively promote the use of clean energy for heating in order to achieve higher quality in business development. Meanwhile, the Group will continue to explore new heat supply systems, with a view to establish a new heating supply system with co-generation as the main heating source and other clean energy as complementary sources. On the basis of the current intelligent regulation and control at the primary network level, the Group will gradually realize joint control of the network and source, and gradually move towards pinpoint control and precise heat supply. The application and promotion of new energy heating technology will enable the Group to develop the most cost-competitive new energy heating model tailored to local conditions through an in-depth analysis of the cost curve of new energy heating technology, thus creating new drivers for profit growth while defending the blue sky for future generations.

The Group will increase its efforts and investment in heating-related scientific and technological innovation as well as technology research and development, encourage in-house research and development projects and apply such results into its business operation. With the use of technologies such as intelligent integrated network, 5G transmission and big data analysis, the Group will further expand the functions of its smart heating network system to be efficiently applied to each sector of operations including heat production and operation adjustment. The Group will also strive to lower its production and operation costs and increase heat utilization efficiency, thereby boosting its business performance.

  1. Prospects of the Construction, Maintenance and Design Business

In the face of the opportunities and challenges arising from the country's "New Infrastructure", the Group will further enhance its independent research and development capabilities on the basis of improving the smart heating network platform and heating network interconnection and intercommunication, increase and extend the channels for promoting the construction, maintenance and design business segment, and expand the revenue-generating capability of this segment in a multi-dimensional manner. In the second half of the year, we will further enhance the technology and service level of our construction, maintenance and design business. On the basis of our existing businesses, we will enhance and increase our professional qualifications, establish a sound and comprehensive mechanism for the commercialization of our scientific and technological achievements, and promote our industrial upgrading with our existing intellectual property rights and patented technologies, so as to achieve the economic development of the Group and safeguard people's livelihood with heat supply. Meanwhile, we will also focus on the advancement and completion of existing projects, optimize business processes, improve service quality and build our brand reputation, laying a solid foundation for the successful completion of various tasks throughout the year and promote quality development.

The Group will also extend its market influence, broaden its customer base and raise risk prevention awareness. We will also capture every business development opportunity and endeavor to raise our core competitiveness so as to reward our Shareholders with excellent results.

  1. EVENTS AFTER THE REPORTING PERIOD

There were no other important events or transactions affecting the Group from 30 June 2020 to the date of this report.

18

CORPORATE

GOVERNANCE

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

CORPORATE GOVERNANCE PRACTICES

The Company has always been committed to enhancing its corporate governance standard and regarded corporate governance as an integral part to creating values for Shareholders. The Company has established a modern corporate governance structure which comprises a number of independently operated and effectively balanced bodies including general meetings, Board of Directors, Board of Supervisors and senior management with reference to the code provisions as set out in the Corporate Governance Code contained in Appendix 14 of the Listing Rules and the requirements of the Articles of Association. The Company has also adopted the Corporate Governance Code as its own corporate governance practices.

COMPLIANCE WITH CORPORATE GOVERNANCE CODE

The Board is committed to maintaining high corporate governance standards. The Board believes that high corporate governance standards are essential in safeguarding the interests of the Shareholders and enhancing corporate value and accountability. The Company has applied the principles set out in the Corporate Governance Code contained in Appendix 14 of the Listing Rules.

The Directors consider that the Company has complied with the applicable code provisions set out in the Corporate Governance Code during the Reporting Period.

COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS, SUPERVISORS AND RELEVANT EMPLOYEES

The Company has adopted the Appendix 10 of the Listing Rules as the Model Code for Directors, Supervisors and relevant employees of the Company in dealing in securities of the Company. Based on the specific enquiry made by the Company with all Directors and Supervisors, all Directors and Supervisors confirmed that they had strictly complied with the required standard set out in the Model Code during the Reporting Period.

The Company is not aware of any non-compliance of the Model Code by the Directors, Supervisors or relevant employees during the Reporting Period.

DIRECTORS' RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS

The Directors acknowledge their responsibility in relation to the preparation of the financial statements and accounts of the Company and to ensure that the financial statements of the Company are prepared in accordance with the relevant regulations and applicable accounting standards and that the financial statements of the Company are published in a timely manner.

INDEPENDENT NON-EXECUTIVE DIRECTORS

The Company has appointed a sufficient number of independent non-executive Directors with appropriate professional qualifications or appropriate accounting or relevant financial management expertise in accordance with the requirements of the Listing Rules. The Company appointed a total of three independent non-executive Directors, namely Mr. Wang Yuguo, Mr. Fu Yachen and Mr. Poon Pok Man.

The first meeting of the independent non-executive Directors of the Company was held on 10 January 2020, at which the meeting was mainly held to discuss matters relating to the asset acquisition scheme.

19

CORPORATE

GOVERNANCE

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

AUDIT COMMITTEE

The Company has established the Audit Committee with written terms of reference in compliance with the Listing Rules, the terms of reference of which are available on the websites of the Hong Kong Stock Exchange and the Company. During the Reporting Period, the Audit Committee comprised three Directors, namely Mr. Poon Pok Man (independent non-executive Director), Mr. Liu Changchun (non-executive Director) and Mr. Wang Yuguo (independent non-executive Director). Mr. Poon Pok Man is the chairman of the Audit Committee.

During the six months ended 30 June 2020, the Audit Committee held 3 meetings. The Company held the first meeting of the Audit Committee for 2020 on 20 January 2020, at which the external auditor's audit plan for 2019 and related work arrangements was presented and a resolution on the Company's "Audit Plan for 2019" was passed.

The Company held the second meeting of the Audit Committee for 2020 on 30 March 2020, at which the external auditor's report on the audit of the financial statements of the Company for the year ended 31 December 2019 was received and the following resolutions were considered and passed:

  1. Resolution on the review of the effectiveness of the Company's financial controls, internal controls and risk management;
  2. Resolution on the review of the effectiveness of the 2019 internal audit process and the approval of future internal audit plans, fee budgets, and other related matters;
  3. Resolution on the status of the 2019 Connected Transactions and Implementation of the Regulations Governing Connected Transactions;
  4. Resolution on the 2019 Audited Consolidated Financial Statements (Near Final Version);
  5. Resolution on the 2019 Annual Results Announcement (Near Final Version);
  6. Resolution on the 2019 Annual Report (Near Final Version);
  7. Resolution on the re-appointment of Ernst & Young as external auditor.

The Company held the third meeting of the Audit Committee for 2020 on 8 June 2020, at which a resolution was passed in relation to the amendment of the "Management Regulations on Connected Transactions of Jilin Province Chuncheng Heating Company Limited* (吉林省春城熱力股份有限公司)".

The Audit Committee of the Company has reviewed and confirmed the announcement of the Group's interim results for the six months ended 30 June 2020, the interim report for 2020 and the unaudited interim financial statements for the six months ended 30 June 2020 prepared in accordance with the requirements of International Accounting Standard ("IAS") 34, Interim Financial Reporting.

The interim financial information is unaudited but has been reviewed by Ernst & Young, the independent auditors of the Company, in accordance with the Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants.

20

CORPORATE

GOVERNANCE

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

REMUNERATION COMMITTEE

The Company has established the Remuneration Committee with written terms of reference in compliance with the Listing Rules, the terms of reference of which are available on the websites of the Hong Kong Stock Exchange and the Company. During the Reporting Period, the Remuneration Committee comprised three Directors, namely, Mr. Fu Yachen (an independent non-executive Director), Mr. Xu Chungang (an executive Director) and Mr. Poon Pok Man (an independent non-executive Director). Mr. Fu Yachen is the Chairman of the Remuneration Committee.

The Company held the first meeting of the Remuneration Committee for 2020 on 30 March 2020, at which resolutions were passed in relation to the review of the remuneration, remuneration policy and remuneration structure of the Directors, Supervisors and senior management.

NOMINATION COMMITTEE

The Company has established the Nomination Committee with written terms of reference in compliance with the Listing Rules and its terms of reference are available on the websites of the Hong Kong Stock Exchange and the Company. During the Reporting Period, the Nomination Committee comprised three Directors, namely Mr. Wang Yuguo (an independent non-executive Director), Mr. Yang Zhongshi (an executive Director) and Mr. Fu Yachen (an independent non-executive Director). Mr. Wang Yuguo is the chairman of the Nomination Committee.

The Company held the first meeting of the Nomination Committee for 2020 on 30 March 2020 and considered and passed the following resolutions.

  1. Resolution on the review of the structure, size, composition and diversity of the Board.
  2. Resolution on the review of the independence of the independent non-executive Directors.
  3. Resolution on the review of the leadership and contributions of Directors.
  4. Resolution on the review of the policy on nominating Directors.
  5. Resolution on the performance of the Company's corporate governance functions and related matters.

STRATEGY COMMITTEE

The Company has established the Strategic Committee with written terms of reference in compliance with the Listing Rules and its terms of reference are available on websites of the Hong Kong Stock Exchange and the Company. During the Reporting Period, the Strategic Committee comprised three Directors, namely Mr. Liu Changchun (a non-executive Director), Mr. Wang Yuguo (an independent non-executive Director) and Mr. Shi Mingjun (an executive Director). Mr. Liu Changchun is the chairman of the Strategic Committee.

During the six months ended 30 June 2020, the Strategic Committee held a total of 2 meetings. The Company held the first meeting of the Strategic Committee for 2020 on 30 March 2020, at which a resolution was passed to review the implementation of the Company's medium and long term strategic plan.

The Company held the second meeting of the strategic committee for 2020 on 8 June 2020, at which a resolution was passed in relation to the acquisition of 50% equity interest in Changchun FAW Sihuan Kinetic Company Limited* (長春一 汽四環動能有限公司).

21

OTHER

INFORMATION

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

SHARE CAPITAL

As at 30 June 2020, the total share capital of the Company comprised 466,700,000 Shares, divided into 350,000,000 Domestic Shares and 116,700,000 H Shares, with par value of RMB1.00 each. After the Listing of the H Shares on the Main Board of the Hong Kong Stock Exchange, the Company did not issue any new shares in exchange for cash.

INTERIM DIVIDEND

The Board does not recommend the payment of an interim dividend for the six months ended 30 June 2020.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OR REDEEMABLE SECURITIES OF THE COMPANY

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities or redeemable securities for the six months ended 30 June 2020.

CONVERTIBLE SECURITIES, OPTIONS, WARRANTS OR SIMILAR RIGHTS

For the six months ended 30 June 2020, neither the Company nor any of its subsidiaries had issued or granted any convertible securities, options, warrants or similar rights or exercised any conversion or subscription rights under any convertible securities, options, warrants or similar rights issued or granted by the Company or any of its subsidiaries at any time.

ISSUE OF BONDS

For the six months ended 30 June 2020, neither the Company nor its subsidiaries had issued any bonds.

INTERESTS AND SHORT POSITIONS OF DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVE IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 30 June 2020, no Director, Supervisor or chief executive of the Company had any interest or short position in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the "SFO")) which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including those taken or deemed as their interests or short positions in accordance with such provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code, to be notified to the Company and the Hong Kong Stock Exchange.

22

OTHER

INFORMATION

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

SUBSTANTIAL SHAREHOLDERS' INTERESTS AND SHORT POSITIONS IN THE SHARES

As at 30 June 2020, to the knowledge of the Directors, the persons (other than a Director, Supervisor or chief executive of the Company) who have an interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company pursuant to Divisions 2 and 3 of Part XV of the SFO and as recorded in the register required to be kept under Section 336 of the SFO were as follows:

Number of

Percentage

Shares/

of relevant

Percentage

underlying

class of

of total

Shares held

share capital

share capital

(share)

(%)

(%)

Name of Shareholders

Types of Shares

Capacity

(Note 6)

(Note 7)

(Note 8)

Changchun Heating (Group) Co., Ltd.

Domestic Shares

Beneficial owner

325,500,000(L)

93.00

69.75

Changchun State-owned Capital

Domestic Shares

Beneficial owner

24,500,000(L)

7.00

5.25

Investment Operation (Group) Co., Ltd.

China Foreign Economic and Trade Trust

H Shares

Trustee

28,120,000(L)

24.10

6.03

Co., Ltd. (Note 1)

Orient Fund Management Co., Ltd. (Note 2)

H Shares

Trustee

18,600,000(L)

15.94

3.99

SDIC Taikang Trust Co., Ltd. (Note 3)

H Shares

Trustee

17,510,000(L)

15.00

3.75

Cititrust Private Trust (Cayman) Limited

H Shares

Interest of a controlled

14,700,000(L)

12.60

3.15

(Note 4)

corporation

Fantasy Races Limited (Note 4)

H Shares

Interest of a controlled

14,700,000(L)

12.60

3.15

corporation

Harvest Well Holdings Limited (Note 4)

H Shares

Interest of a controlled

14,700,000(L)

12.60

3.15

corporation

Joywise Holdings Limited (Note 4)

H Shares

Interest of a controlled

14,700,000(L)

12.60

3.15

corporation

Ming Fai International Limited (Note 4)

H Shares

Interest of a controlled

14,700,000(L)

12.60

3.15

corporation

Sunshine 100 China Holdings Ltd. (Note 4)

H Shares

Beneficial owner

14,700,000(L)

12.60

3.15

HE Libo (Note 5)

H Shares

Beneficial owner

6,000,000(L)

5.14

1.29

WANG Fujiang (Note 5)

H Shares

Beneficial owner

6,000,000(L)

5.14

1.29

Notes:

  1. China Foreign Economic and Trade Trust Co., Ltd. is the trustee of SCBCN-Foreign Economy and Trade Trust Co., Ltd-Fotic Wuxingbaichuan No. 37 Unitrust.
  2. Orient Fund Management Co., Ltd. is a private trustee.
  3. SDIC Taikang Trust Co., Ltd. is the trustee of SDIC Taikang Trust - Ruijin No. 8 QDII Single Fund Trust.
  4. Sunshine 100 China Holdings Ltd. Limited is interested in 14,700,000 H Shares. Sunshine 100 China Holdings Ltd is owned as to 66.11% by Joywise Holdings Limited; Joywise Holdings Limited are owned as to 60% and 40% by Harvest Well Holdings Limited and Ming Fai International Limited, respectively; each of Harvest Well Holdings Limited and Ming Fai International Limited is owned as to 72.4% by Fantasy Races Limited; and Fantasy Races Limited is owned as to 100% by Cititrust Private Trust (Cayman) Limited. As such, by virtue of the SFO, Joywise Holdings Limited, Harvest Well Holdings Limited, Ming Fai International Limited and Fantasy Races Limited are deemed to be interested in the H Shares held by Sunshine 100 China Holdings Ltd.
  5. He Libo and Wang Fujiang are each other's spouse, each of whom holds 3,000,000 shares as beneficial owners. Therefore, according to the SFO, He Libo is considered to be interested in the H Shares held by Wang Fujiang, that is, a total of 6,000,000 shares, and vice versa.
  6. The Letter (L) denotes the relevant person's long position in such Shares.
  7. Based on 350,000,000 Domestic Shares or 116,700,000 H Shares of the Company in issue as at 30 June 2020.
  8. Based on the total issued share capital of the Company of 466,700,000 Shares as at 30 June 2020.

23

OTHER

INFORMATION

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

USE OF PROCEEDS FROM THE LISTING

The Shares of the Company was successfully listed on the Main Board of the Hong Kong Stock Exchange on 24 October 2019 (the "Listing Date"). A total of 116.7 million H Shares with par value of RMB1.00 each were issued at the price of HK$2.35 per Share through global offering, accounting for 25% of the total share capital after the issue, representing a financing scale of approximately HK$274.2 million. The net proceeds from the global offering, after deducting the underwriting commission and other estimated expenses in connection with the global offering, amounted to approximately HK$220.5 million (the "IPO Proceeds").

The Company has utilized and will utilize the IPO Proceeds for the purposes which are consistent with those set out in the prospectus of the Company dated 27 September 2019. The IPO Proceeds amounted to HK$220.5 million, among which:

  1. approximately HK$90.4 million (equivalent to approximately RMB81.8 million), representing approximately 41.0% of the IPO Proceeds, has not been utilized since the Listing Date and up to 30 June 2020. It is expected to be utilized for further increasing the level of automation in our heat supply business by the end of 2021 by enhancing our smart heating network system to achieve a more stable, efficient and technologically advanced heat supply. Most of the net proceeds earmarked for this category will be used for upgrading of our system, purchasing relevant equipment and sensors and installation of the equipment in the heat exchange stations and end-users' properties.
  2. approximately HK$90.4 million (equivalent to approximately RMB81.8 million), representing approximately 41.0% of the IPO Proceeds, has not been utilized since the Listing Date and up to 30 June 2020. It is expected to be utilized for upgrading and replacement of existing primary distribution pipelines and heat supply facilities by the end of 2021 to enhance operational efficiency of our heat distribution network.
  3. approximately HK$28.7 million (equivalent to approximately RMB25.9 million), representing approximately 13.0% of the IPO Proceeds, has been partially utilized. Since the Listing Date and up to 30 June 2020, HK$24.0 million of which has been utilized for our heat service area expansion to grow our heat supply business, including necessary construction of primary distribution pipelines and heat supply facilities required thereunder. The remaining HK$4.7 million will be used for the construction of heat supply facilities for the expansion of other heat supply business and is intended to be fully utilized by the fourth quarter of 2020.
  4. approximately HK$11.0 million (equivalent to approximately RMB10.0 million), representing approximately 5.0% of the IPO Proceeds, has been utilized in full for financing part of the consideration for the acquisition of a 50% equity interest in Xixing Energy on 8 June 2020 while the remaining consideration has been financed by the internal resources of the Group.

The unutilized IPO Proceeds have been deposited into short-term demand deposits in a bank account maintained by the Group.

With the impact of the recent outbreak of the COVID-19, the Board considered that the execution of the Group's expansion plan as set out above may be impeded. The Company is currently reviewing the Group's expansion plan and will closely monitor the development of the situation from time to time and make further announcement(s) regarding the situation as and when appropriate.

24

OTHER

INFORMATION

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

CHANGE IN INFORMATION OF DIRECTORS AND SUPERVISORS

Mr. Yang Zhongshi, an executive Director of the Company, resigned as a director of Changchun Heating Power (Group) Company Limited* ( 長春市熱力（集團）有限責任公司), a Shareholder of the Company, with effect from October 2019.

Mr. Shi Mingjun, an executive Director of the Company, was re-designated as an executive director (legal person) from the chairman (legal person) of Jilin Province Xixing Energy Limited* (吉林省西興能源有限公司), previously known as Changchun FAW Sihuan Kinetic Company Limited* (長春一汽四環動能有限公司), which is a company under the Company, with effect from June 2020 and resigned as the executive director and managing director of Jilin Province Chuncheng Biomass Power Co., Ltd.* (吉林省春城生物質能源有限公司) with effect from January 2020.

Mr. Fu Yachen, an independent non-executive Director of the Company, resigned as an independent director of Jilin Bank with effect from April 2020.

Save as those disclosed above, up to 30 June 2020, there is no change in the information of directors and supervisors of the Company.

STAFF AND REMUNERATION POLICY

As at 30 June 2020, the Group had a total of 1,298 employees, including 114 employees of Xixing Energy. The remuneration of the Group's employees comprised basic salary and performance bonus. Performance bonus are determined based on the Group's performance and performance evaluation.

SIGNIFICANT LEGAL PROCEEDINGS

As at 30 June 2020, the Company was not engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened against the Company.

25

INDEPENDENT

REVIEW REPORT

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

Ernst & Young

Tel

: +852 2846 9888

22/F, CITIC Tower

1

Fax

: +852 2868 4432

1 Tim Mei Avenue

22

ey.com

Central, Hong Kong

To the board of directors of Jilin Province Chuncheng Heating Company Limited

(Incorporated in the People's Republic of China with limited liability)

INTRODUCTION

We have reviewed the interim financial information set out on pages 26 to 64, which comprises the condensed consolidated statement of financial position of Jilin Province Chuncheng Heating Company Limited (the "Company") and its subsidiaries (collectively, the "Group") as at 30 June 2020 and the related condensed consolidated statement of profit or loss and other comprehensive income, changes in equity and cash flows for the six-month period then ended, and other explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and International Accounting Standard 34 Interim Financial Reporting ("IAS 34") issued by the International Accounting Standards Board ("IASB"). The directors of the Company are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34. Our responsibility is to express a conclusion on this interim financial information based on our review. Our report is made solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

SCOPE OF REVIEW

We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Hong Kong Institute of Certified Public Accountants. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the interim financial information is not prepared, in all material respects, in accordance with IAS 34.

Certified Public Accountants

Hong Kong

21 August 2020

26

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR

LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED

I INTERIM REPORT 2020

For the six months ended 30 June

2020

2019

Notes

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Revenue

4

629,596

662,692

Cost of sales

6

(478,143)

(515,185)

Gross profit

151,453

147,507

Other income and gains, net

4

8,295

4,938

Administrative expenses

(44,338)

(40,907)

Selling expenses

(19)

(469)

Reversals of impairment on financial and contract assets, net

6

5,453

10,464

Finance costs

5

(808)

(4,396)

Share of profits and losses of a joint venture

1,428

(1,653)

Profit before tax

6

121,464

115,484

Income tax expense

7

(31,889)

(31,481)

Profit for the period

89,575

84,003

Attributable to:

89,575

Owners of the Company

84,003

Non-controlling interests

-

-

89,575

84,003

OTHER COMPREHENSIVE INCOME

Other comprehensive income that will not be reclassified to

profit or loss in subsequent periods:

-

Remeasurement of supplemental benefit obligations

21

(183)

Other comprehensive income for the period

-

(183)

Total comprehensive income for the period

89,575

83,820

Attributable to:

89,575

Owners of the Company

83,820

Non-controlling interests

-

-

89,575

83,820

Earnings per share expressed in RMB

9

0.19

Basic

0.24

Diluted

0.19

0.24

The notes on pages 31 to 64 form part of this interim condensed consolidated financial information.

27

INTERIM CONDENSED CONSOLIDATED STATEMENT

OF FINANCIAL POSITION

As at 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I

INTERIM REPORT 2020

30 June

31 December

2020

2019

Notes

RMB'000

RMB'000

(Unaudited)

(Audited)

NON-CURRENT ASSETS

Property, plant and equipment

10

868,147

875,200

Investment properties

41

41

Intangible assets

3,620

3,750

Deferred tax assets

11

23,353

24,877

Investment in a joint venture

-

57,561

Right-of-use assets

4,520

2,537

Other non-current assets

1,511

4,197

TOTAL NON-CURRENT ASSETS

901,192

968,163

CURRENT ASSETS

Inventories

13,733

9,105

Trade and bills receivables

12

294,426

308,955

Contract assets

13

143,941

198,861

Prepayments and other receivables

14

12,297

379,474

Financial assets at fair value through profit or loss

15

50,763

-

Other current assets

16

13,485

9,243

Restricted deposits

2,000

-

Cash and cash equivalents

17

441,480

699,940

TOTAL CURRENT ASSETS

972,125

1,605,578

CURRENT LIABILITIES

Trade payables

18

186,712

398,137

Other payables and accruals

19

133,424

90,227

Interest-bearing bank and other borrowings

20

80,763

10,715

Lease liabilities

716

1,355

Tax payable

28,520

39,273

Supplemental benefit obligations

21

417

617

Contract liabilities

4

96,923

681,620

Deferred income

22

2,931

2,555

TOTAL CURRENT LIABILITIES

530,406

1,224,499

NET CURRENT ASSETS

441,719

381,079

TOTAL ASSETS LESS CURRENT LIABILITIES

1,342,911

1,349,242

continued/...

The notes on pages 31 to 64 form part of this interim condensed consolidated financial information.

28

INTERIM CONDENSED CONSOLIDATED STATEMENT

OF FINANCIAL POSITION

As at 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I

INTERIM REPORT 2020

30 June

31 December

2020

2019

Notes

RMB'000

RMB'000

(Unaudited)

(Audited)

NON-CURRENT LIABILITIES

Lease liabilities

1,057

1,277

Supplemental benefit obligations

21

9,591

9,191

Contract liabilities

4

441,917

468,437

Deferred income

22

30,525

29,887

Deferred tax liabilities

11

9,135

-

TOTAL NON-CURRENT LIABILITIES

492,225

508,792

NET ASSETS

850,686

840,450

EQUITY

Equity attributable to owners of the Company

Share capital

23

466,700

466,700

Reserves

24

383,986

373,750

TOTAL EQUITY

850,686

840,450

Yang Zhongshi

Xu Chungang

Director

Director

The notes on pages 31 to 64 form part of this interim condensed consolidated financial information.

29

INTERIM CONDENSED CONSOLIDATED STATEMENT

OF CHANGES IN EQUITY

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED

I INTERIM REPORT 2020

Other

Share

Capital

Safety

comprehensive

Statutory

Retained

Notes

capital

reserve*

fund*

income*

reserve*

earnings*

Total equity

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

At 1 January 2020

466,700

135,199

9,763

1,903

19,542

207,343

840,450

Profit for the period

-

-

-

-

-

89,575

89,575

Total comprehensive income for the period

-

-

-

-

-

89,575

89,575

Appropriation and utilization of safety fund,

net

24(c)

-

-

6,242

-

-

(6,242)

-

Dividends declared by the Company

8

-

-

-

-

-

(79,339)

(79,339)

At 30 June 2020 (Unaudited)

466,700

135,199

16,005

1,903

19,542

211,337

850,686

At 1 January 2019

350,000

50,000

8,419

(361)

8,874

85,384

502,316

Profit for the period

-

-

-

-

-

84,003

84,003

Other comprehensive income

- Remeasurement of employee benefit

obligations

-

-

-

(183)

-

-

(183)

Total comprehensive income for the period

-

-

-

(183)

-

84,003

83,820

Recognition of other changes in other

reserve of a joint venture

-

(2,291)

-

-

-

-

(2,291)

Appropriation and utilization of safety fund,

net

24(c)

-

-

5,141

-

-

(5,141)

-

At 30 June 2019 (Unaudited)

350,000

47,709

13,560

(544)

8,874

164,246

583,845

  • These reserve accounts comprise the consolidated reserves of RMB383,986,000 in the interim condensed consolidated statement of financial position as at 30 June 2020.

The notes on pages 31 to 64 form part of this interim condensed consolidated financial information.

30

INTERIM CONDENSED CONSOLIDATED STATEMENT

OF CASH FLOWS

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED

I INTERIM REPORT 2020

For the six months ended 30 June

2020

2019

Notes

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Net cash used in operating activities

(282,708)

(91,447)

Purchases of property, plant and equipment and intangible assets

(7,384)

(8,657)

Acquisition of a subsidiary

27

(30,192)

-

Dividend received from a joint venture

-

3,175

Net cash used in investing activities

(37,576)

(5,482)

Payment of principal of lease liabilities

(459)

(651)

Payment of interest expenses of lease liabilities

(61)

(84)

Transaction costs of issue of shares

(5,262)

(10,394)

Proceeds from bank and other borrowings

70,048

-

Repayment of bank and other borrowings

-

(108,000)

Interest paid

(365)

(2,994)

Dividends paid by the Company

(4,652)

-

Repayment to related parties

-

(1,472)

Net cash generated from/(used in) financing activities

59,249

(123,595)

Net decrease in cash and cash equivalents

(261,035)

(220,524)

Net foreign exchange differences

2,575

26

Cash and cash equivalents at 1 January

17

699,940

358,884

Cash and cash equivalents at 30 June

17

441,480

138,386

The notes on pages 31 to 64 form part of this interim condensed consolidated financial information.

31

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

1. CORPORATE INFORMATION

Jilin Province Chuncheng Heating Company Limited (the "Company"), formerly known as "Jilin Province Changre New Energy Co., Ltd." or" Jilin Province Chuncheng Heating Limited Liability Company", is a joint stock company with limited liability incorporated in the People's Republic of China (the "PRC") on 23 October 2017 as a result of the reorganization of Changchun Heating Power (Group) Company Limited ("Changchun Heating Group" or the "Shareholder") and its subsidiaries (the "Reorganization") in preparation for listing the Company's H Shares on the Main Board of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"). The registered office of the Company is located at 28/F (Hong Cheng Xiyu), 998 Nanhu Avenue, Nanguan District Sub-district B, Changchun, Jilin Province, the PRC.

The Company and its subsidiaries (collectively the "Group") were involved in the following principal activities:

  • Heat supply, including the provision and distribution of heat, pipeline connection fee and heat transmission; and
  • Construction, maintenance and design services and others.

In the opinion of the directors of the Company ("Directors"), the Controlling Shareholder of the Company is Changchun Heating Group, a company established and domiciled in the PRC and wholly owned by the State-owned Assets Supervision and Administration Commission of Changchun ("SASAC Changchun") (長春市人 民政府國有資產監督管理委員會).

The interim condensed consolidated financial information is presented in thousands of Renminbi ("RMB"), unless otherwise stated.

32

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

1. CORPORATE AND GROUP INFORMATION (CONTINUED)

Information about subsidiaries

Particulars of the Company's subsidiaries are as follows:

Place and date

of incorporation/

registration

Percentage of

and place of

Registered

equity attributable

Principal

Name of company

operations

share capital

to the Company

activities

Direct

Indirect

Changchun City Runfeng

Jilin, the PRC,

RMB40,000,000

100%

-

Engineering

Construction Installation

10 October 2012

construction and

Engineering Company

installation

Limited ("Changchun

Runfeng")

Jilin Province Heating

Jilin, the PRC,

RMB5,000,000

100%

-

Heating

Engineering Design and

22 June 2007

engineering

Research Company

design

Limited ("Heating

Engineering Design")

Jilin Province Changre

Jilin, the PRC,

RMB10,000,000

100%

-

Engineering

Maintenance Service

9 August 2016

maintenance

Company Limited

("Changre Maintenance")

Jilin Province Changre

Jilin, the PRC,

RMB50,000,000

100%

-

Pipeline

Pipelines Transmission

15 September

transmission

Company Limited

2017

("Changre Pipelines")

Jilin Province Changre

Jilin, the PRC,

RMB4,000,000

100%

-

Maintenance

Electrical Apparatus

24 October 2017

service

Company Limited

("Changre Electrical

Apparatus")

Jilin Province Chuncheng

Jilin, the PRC,

RMB20,000,000

100%

-

Biomass heat

Biomass Power Co., Ltd.

10 December 2018

supply

("Biomass Power")

Jilin Province Xixing

Jilin, the PRC,

RMB20,000,000

100%

-

Heat supply and

Energy Co., Ltd ("Xixing

17 October 2008

electricity selling

Energy", formerly known

as Changchun FAW

Sihuan Kinetic Company

Limited)

33

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

2. BASIS OF PREPARATION AND CHANGES IN ACCOUNTING POLICES AND DISCLOSURES

2.1 BASIS OF PREPARATION

This interim condensed consolidated financial information for the six months ended 30 June 2020 has been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed consolidated financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual consolidated financial statements for the year ended 31 December 2019.

2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2019, except for the adoption of the following revised International Financial Reporting Standards ("IFRSs") for the first time for the current period's financial information.

Amendments to IFRS 3

Definition of a Business

Amendments to IFRS 9, IAS 39 and IFRS 7

Interest Rate Benchmark Reform

Amendments to IFRS 16

Covid-19-Related Rent Concessions

Amendments to IAS 1 and IAS 8

Definition of Material

Conceptual Framework for Financial Reporting issued on 29 March 2018

The nature and impact of the revised IFRSs are described below.

  1. Amendments to IFRS 3 clarify and provide additional guidance on the definition of a business. The amendments clarify that for an integrated set of activities and assets to be considered a business, it must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. A business can exist without including all of the inputs and processes needed to create outputs. The amendments remove the assessment of whether market participants are capable of acquiring the business and continue to produce outputs. Instead, the focus is on whether acquired inputs and acquired substantive processes together significantly contribute to the ability to create outputs. The amendments have also narrowed the definition of outputs to focus on goods or services provided to customers, investment income or other income from ordinary activities. Furthermore, the amendments provide guidance to assess whether an acquired process is substantive and introduce an optional fair value concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business. The Group has applied the amendments prospectively to transactions or other events that occurred on or after 1 January 2020. The amendments did not have any significant impact on the financial position and performance of the Group.
  2. Amendments to IFRS 9, IAS 39 and IFRS 7 address the effects of interbank offered rate reform on financial reporting. The amendments provide temporary reliefs which enable hedge accounting to continue during the period of uncertainty before the replacement of an existing interest rate benchmark. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties. The amendments did not have any impact on the financial position and performance of the Group as the Group does not have any interest rate hedge relationships.

34

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (CONTINUED)

  1. Amendment to IFRS 16 provides a practical expedient for lessees to elect not to apply lease modification accounting for rent concessions arising as a direct consequence of the covid-19 pandemic. The practical expedient applies only to rent concessions occurring as a direct consequence of the covid-19 pandemic and only if (i) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
    1. any reduction in lease payments affects only payments originally due on or before 30 June 2021; and
    2. there is no substantive change to other terms and conditions of the lease. The amendment is effective retrospectively for annual periods beginning on or after 1 June 2020 with earlier application permitted. During the six months ended 30 June 2020, the Group had no material rent concessions granted by the lessors. Therefore the amendment did not have any impact on the Group's interim condensed consolidated financial information.
  3. Amendments to IAS 1 and IAS 8 provide a new definition of material. The new definition states that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments clarify that materiality will depend on the nature or magnitude of information. The amendments did not have any impact on the Group's interim condensed consolidated financial information.
  4. The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. The amendments had no impact on the Group's interim condensed consolidated financial information.

3. OPERATING SEGMENT INFORMATION

For management purposes, the Group considers the business from the perspective of service activities, which mainly include the following two reportable segments:

  • Heat supply, including the provision and distribution of heat, pipeline connection fee and heat transmission; and
  • Construction, maintenance and design services, including certain rental services and the sales of goods.

The management monitors the results of the Group's operating segments separately for the purpose of making decisions about resource allocation and performance assessment. The operating segments are each managed separately because they distribute distinct products/services with different production/distribution processes and due to their distinct operating and gross margin characteristics. Segment performance is evaluated based on reportable segment profit/loss, which is measured consistently with the Group's profit/loss before tax.

35

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

3. OPERATING SEGMENT INFORMATION (CONTINUED)

Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the contractual prices which are comparable to prevailing market prices.

Construction,

maintenance

Six months ended

and design

30 June 2020 (Unaudited)

Heat supply

services

Total

RMB'000

RMB'000

RMB'000

Segment revenue

555,558

74,038

629,596

Sales to external customers

Intersegment sales

-

5,998

5,998

555,558

80,036

635,594

Reconciliation:

Elimination of intersegment sales

(5,998)

Revenue

629,596

Segment results

117,278

4,023

121,301

Reconciliation:

Elimination of intersegment results

394

(231)

163

Profit before tax

121,464

As at 30 June 2020 (Unaudited)

Segment assets

1,422,707

450,610

1,873,317

Segment liabilities

817,039

205,592

1,022,631

36

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

3. OPERATING SEGMENT INFORMATION (CONTINUED)

Construction,

maintenance

Six months ended

and design

30 June 2019 (Unaudited)

Heat supply

services

Total

RMB'000

RMB'000

RMB'000

Segment revenue

Sales to external customers

532,954

129,738

662,692

Intersegment sales

-

11,462

11,462

532,954

141,200

674,154

Reconciliation:

Elimination of intersegment sales

(11,462)

Revenue

662,692

Segment results

103,070

12,371

115,441

Reconciliation:

Elimination of intersegment results

66

(23)

43

Profit before tax

115,484

As at 31 December 2019 (Audited)

Segment assets

2,017,928

555,813

2,573,741

Segment liabilities

1,327,392

405,899

1,733,291

Geographical information

The Group's revenues from customers are all attributed to the PRC, and the Group's non-current assets are all located in the PRC.

Information of major customers

Revenue of approximately RMB49,018,000 for the six months ended 30 June 2020 (six months ended 30 June 2019: RMB46,069,000) was derived from the "Construction, maintenance and design services" segment to a single customer.

Seasonality of operations

Both the heat supply business and construction, maintenance and design services are subject to seasonality.

  1. Heat supply period was from October of each year to April of the following year. ii)The construction, maintenance and design services also experienced seasonality due to the fact that most of the projects were undertaken outside of the heat supply period to avoid disruption or suspension of heat supply. As a result, the revenue and profit may fluctuate significantly over the year.

37

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

4. REVENUE, OTHER INCOME AND GAINS, NET

An analysis of the Group's revenue, other income and gains is as follows:

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Revenue from contracts with customers

515,555

Provision and distribution of heat

500,763

Pipeline connection fee

27,707

27,002

Heat transmission

12,296

5,189

Engineering construction

23,169

84,549

Engineering maintenance

46,642

38,140

Design services

3,448

3,408

Sale of goods

605

3,513

629,422

662,564

Revenue from other sources

174

Gross rental income from operating leases, fixed lease payments

128

Total

629,596

662,692

Other income and gains, net

6,442

Bank interest income

3,855

Government grants*

1,331

893

Gains from financial assets at fair value through profit or loss

131

-

Gain on acquisition of a subsidiary

950

-

Loss on a previously held equity interest remeasured at

fair value on the acquisition date

(4,337)

-

Foreign exchange gains

2,575

26

Others

1,203

164

Total

8,295

4,938

  • There are no unfulfilled conditions and other contingencies relating to these grants.

38

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

4. REVENUE, OTHER INCOME AND GAINS, NET (CONTINUED)

  1. Disaggregated revenue information

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Type of goods or services

Heat supply segment:

- Provision and distribution of heat

515,555

500,763

- Pipeline connection fee

27,707

27,002

- Heat transmission

12,296

5,189

555,558

532,954

Construction, maintenance, and design services segment:

- Engineering construction

23,169

84,549

- Engineering maintenance

46,642

38,140

- Design services

3,448

3,408

Sale of goods

605

3,513

Total

629,422

662,564

Timing of revenue recognition

Services delivered over time

616,521

653,862

Goods or services transferred at a point in time

12,901

8,702

Total

629,422

662,564

39

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

4. REVENUE, OTHER INCOME AND GAINS, NET (CONTINUED)

  1. Disaggregated revenue information (Continued)
    1. Contract liabilities

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Current:

Heat supply

63,427

670,230

Construction, maintenance and design services

33,496

11,390

96,923

681,620

Non-current:

Heat supply

441,917

468,437

Construction, maintenance and design services

-

-

441,917

468,437

Contract liabilities include advances received for the provision and distribution of heat, pipeline connection service and construction and maintenance services.

  1. Revenue recognized in relation to contract liabilities
    The following table shows the amounts of revenue recognized in the current reporting period that were included in the contract liabilities at the beginning of the reporting period:

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Provision and distribution of heat

503,860

544,003

Pipeline connection fee

27,707

27,003

Construction, maintenance and design services

164

329

531,731

571,335

40

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

4. REVENUE, OTHER INCOME AND GAINS, NET (CONTINUED)

  1. Performance obligations

The Group has elected the practical expedient of not disclosing the remaining performance obligation for the provision and distribution of heat and construction, maintenance and design services rendered because the performance obligation is part of a contract that has an original expected duration of one year or less.

The amounts of transaction prices allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) are as follows:

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Within 1 year

55,488

53,975

Over 1 year

441,917

468,437

497,405

522,412

The above remaining performance obligations expected to be recognized in more than one year relate to the provision of the pipeline connection and heat metering reform services. The amount disclosed above does not include variable consideration which is constrained.

5.

FINANCE COSTS

An analysis of the Group's finance costs is as follows:

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Interest on interest-bearing bank and other borrowings

563

4,111

Interest expenses on lease liabilities

61

84

Others

184

201

808

4,396

41

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

6.

PROFIT BEFORE TAX

The Group's profit before tax is arrived at after charging/(crediting):

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Cost of heat supply

415,399

406,007

Cost of construction, maintenance and design services

62,744

109,178

478,143

515,185

Employee benefit expense:

Wages, salaries and allowances

61,858

50,884

Contributions to pension plans

10,722

8,971

Housing funds

7,423

5,748

Welfare and other expenses

1,873

7,836

Service cost

227

283

Employee benefit expenses

82,103

73,722

Depreciation*

45,331

45,756

Amortization*

2,086

2,460

Depreciation of right-of-use assets

713

671

Interest expenses on lease liabilities (Note 5)

61

84

Rental expense - short term**

250

250

Maintenance and repair expenses

35

6

Reversals of impairment on financial and contract assets, net

(5,453)

(10,464)

Bank interest income (Note 4)

(6,442)

(3,855)

Gains from financial assets at fair value through profit or loss (Note 4)

(131)

-

Gain on acquisition of a subsidiary (Note 4)

(950)

-

Loss on a previously held equity interest remeasured

at fair value on the acquisition date (Note 4)

4,337

-

Government grants (Note 4)

(1,331)

(893)

Foreign exchange gains, net

(2,575)

(26)

  • The depreciation and amortization, except for the depreciation of right-of-use assets, are included in "Cost of sales" and "Administrative expenses" in the condensed consolidated statement of profit or loss and other comprehensive income.
  • The rental expense - short term is included in "Cost of sales" and "Administrative expenses" in the condensed consolidated statement of profit or loss and other comprehensive income.

42

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

7.

INCOME TAX EXPENSE

The Group's major components of income tax expense are as follows:

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Current income tax

30,424

28,181

Deferred tax

1,465

3,300

Total tax charge for the period

31,889

31,481

A reconciliation of the tax expense applicable to profit before tax at the statutory rates for the jurisdictions in which the Company and the majority of subsidiaries are domiciled to the tax expense at the effective tax rate is as follows:

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Profit before tax

121,464

115,484

Tax at the statutory tax rate of 25%

30,366

28,871

Effect of lower tax rates of certain subsidiaries

-

(296)

Non taxable income

(321)

-

Non-deductible expenses

1,193

2,863

Tax losses not recognized

762

132

Others

(111)

(89)

31,889

31,481

The Company's PRC subsidiaries are subject to income tax at 25% on their respective taxable incomes as calculated in accordance with the Enterprise Income Tax Law and its relevant regulations (the "Actual Method") except for Heating Engineering Design and Changre Electrical Apparatus, which are qualified as small low-profit enterprises. For the part of annual taxable income less than or equal to RMB1 million, the taxable income should be deducted by 25% and the income tax rate is 20%; for the part of annual taxable income exceeding RMB1 million but not exceeding RMB3 million, the taxable income should be deducted by 50% and the income tax rate is 20%.

43

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

8. DIVIDENDS

  1. Interim dividends

The board of directors did not recommend the distribution of any interim dividends to shareholders for the six months ended 30 June 2020 (six months ended 30 June 2019: Nil).

  1. Dividends payable to shareholders attributable to the previous financial year, approved during the interim period

Final dividend of RMB0.17 per share (inclusive of tax) amounting to RMB79.3 million in aggregate in respect of the financial year ended 31 December 2019, has been approved in the 2019 annual general meeting. The above final dividend has not been paid to shareholders as at 30 June 2020.

9. EARNINGS PER SHARE

The basic and diluted earnings per share amounts for the reporting period were calculated as follows:

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Profit for the period attributable to owners of the Company (RMB)

89,575

84,003

Weighted average number of ordinary shares

Basic

466,700,000

350,000,000

Diluted

466,700,000

350,000,000

Earnings per share attributable to owners of the Company

(RMB per share)

Basic

0.19

0.24

Diluted

0.19

0.24

10. PROPERTY, PLANT AND EQUIPMENT

For the six months ended 30 June 2020, the property, plant and equipment decreased by RMB7,053,000, which was mainly because of the depreciation of pipelines.

None of the Group's property, plant and equipment was pledged to secure the Group's interest-bearing bank and other borrowings as at 30 June 2020 (31 December 2019: nil).

There was no impairment of property, plant and equipment provision for the six months ended 30 June 2020 (six months ended 30 June 2019: nil).

44

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

11. DEFERRED TAX

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred taxes relate to the same tax authority.

The movements in deferred tax assets and liabilities during the period ended 30 June 2020 without taking into consideration the offsetting of balances within the same tax jurisdiction are as follows:

Movements in deferred tax assets:

Fair value

adjustments

arising from

acquisition

Provision

of a

Unrealized

Accrued

for

Deferred

subsidiary

profits

expenses

impairment

income

Tax losses

Total

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

At 1 January 2019

-

343

3,304

13,691

2,070

-

19,408

Deferred tax

credited/(debited)

to profit or loss

during the period

-

429

(852)

3,535

2,280

77

5,469

At 31 December

2019 (Audited)

and 1 January

2020

-

772

2,452

17,226

4,350

77

24,877

Acquisition of a

subsidiary

242

-

-

434

581

-

1,257

Deferred tax

credited/(debited)

to profit or loss

during the period

(31)

16

50

(1,343)

(328)

-

(1,636)

At 30 June 2020

(Unaudited)

211

788

2,502

16,317

4,603

77

24,498

45

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

11. DEFERRED TAX (CONTINUED)

Movements in deferred tax liabilities:

Fair value

adjustments

arising from

acquisition

Provision

of a

Unrealized

Accrued

for

Deferred

subsidiary

profits

expenses

impairment

income

Tax losses

Total

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

At 31 December

2019 (Audited)

and 1 January

2020

-

-

-

-

-

-

-

Acquisition of a

subsidiary

10,451

-

-

-

-

-

10,451

Deferred tax debited

to profit or loss

during the period

(171)

-

-

-

-

-

(171)

At 30 June 2020

(Unaudited)

10,280

-

-

-

-

-

10,280

For presentation purposes, certain deferred tax assets and liabilities have been offset in the condensed consolidated statement of financial position. The following is the balances of the Group for financial reporting purposes:

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Net deferred tax assets

23,353

24,877

Net deferred tax liabilities

9,135

-

46

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

12. TRADE AND BILLS RECEIVABLES

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Trade receivables

332,248

349,090

Less: Provision for impairment

(42,477)

(40,135)

289,771

308,955

Bills receivable

4,655

-

294,426

308,955

Trade receivables were unsecured and non-interest-bearing.

An ageing analysis of the trade and bills receivables, based on the invoice date and net of loss allowance, is as follows:

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Within 1 year

246,496

286,361

Between 1 and 2 years

41,099

18,677

Between 2 and 3 years

5,401

3,125

Between 3 and 4 years

777

477

Between 4 and 5 years

653

315

Over 5 years

-

-

294,426

308,955

The movements in the loss allowance for impairment of trade receivables are as follows:

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

At the beginning of the period/year

40,135

23,941

Impairment loss recognized

7,624

17,600

Impairment loss reversed

(5,282)

(1,406)

At the end of the period/year

42,477

40,135

47

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

12. TRADE RECEIVABLES (CONTINUED)

Impairment under IFRS 9

The Group has provided and distributed heat and provided construction, maintenance and design services to the Shareholder and fellow subsidiaries. The Group traded with such enterprises and had never had any receivables that could not be recovered. Therefore, the directors of the Group were of the opinion that no impairment allowance was necessary for the Shareholder and fellow subsidiaries considering the current conditions and forecasts of future economic conditions, as appropriate.

The Group applies the simplified approach to the provision for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables (excluding receivables from the Shareholder and fellow subsidiaries). Measurement of the expected credit losses on trade receivables excluding receivables from the Shareholder and fellow subsidiaries has been grouped based on shared credit risk characteristics and the ageing.

13. CONTRACT ASSETS

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Contract assets arising from construction and maintenance services

152,970

213,930

Less: Provision for impairment

(9,029)

(15,069)

143,941

198,861

The contract assets primarily relate to the Group's right to consideration for work completed but not billed because the rights are conditioned on the Group's future performance in satisfying the respective performance obligations at the reporting date in respect of construction contracts. Upon completion of construction and acceptance by the customers, the amounts recognized as contract assets are reclassified to trade receivables.

The movements in the loss allowance for impairment of contract assets are as follows:

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

At the beginning of the period/year

15,069

21,119

Impairment loss reversed

(6,040)

(6,050)

At the end of the period/year

9,029

15,069

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates for the measurement of the expected credit losses for the contract assets are based on those of the trade receivables as the contract assets and the trade receivables are from the same customer base.

48

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

14. PREPAYMENTS AND OTHER RECEIVABLES

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Prepayments*

1,776

369,538

Staff advances

1,167

571

Deposits

1,746

1,881

Due from the Shareholder (Note 26(c))

116

51

Others

7,635

7,575

12,440

379,616

Less: Provision for impairment

(143)

(142)

12,297

379,474

  • Prepayments mainly include prepayments for heat procurement as at 31 December 2019, which was transferred to "cost of sales" with heat supply provided during the six months ended 30 June 2020.

The movements in loss allowance for impairment are as follows:

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

At the beginning of the period/year

142

71

Impairment loss recognized

1

71

At the end of the period/year

143

142

Impairment under IFRS 9

Where applicable upon financial assets above, an impairment analysis is performed at the end of each reporting period by considering the probability of default by applying a loss rate approach with reference to the historical record of the Group. The loss rate is adjusted to reflect the current conditions and forecasts of future economic conditions, as appropriate. No significant impairment was provided during the reporting period.

49

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

15. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

30 June 31 December

20202019

RMB'000 RMB'000

(Unaudited) (Audited)

Financial assets at fair value through profit or loss (Note)

50,763

-

Note: Financial assets at fair value through profit or loss represent wealth management products issued by financial institutions with guaranteed principal amounts and variable returns.

16. OTHER CURRENT ASSETS

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Deductible value-added tax

9,857

3,850

Deferred expenses

3,628

5,347

Others

-

46

13,485

9,243

17. CASH AND CASH EQUIVALENTS

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Cash and cash equivalents

441,480

699,940

Cash and bank balances denominated in:

- RMB

441,480

699,940

The RMB is not freely convertible into other currencies. However, under Mainland China's prevailing rules and regulations over foreign exchange, the Group is permitted to exchange RMB for other currencies through banks authorized to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank balances are deposited with creditworthy banks with no recent history of default.

50

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

18. TRADE PAYABLES

An ageing analysis of the trade payables as the end of each reporting period, based on the invoice dates, is as follows:

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Within 1 year

139,249

332,668

More than one year

47,463

65,469

186,712

398,137

19. OTHER PAYABLES AND ACCRUALS

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Payables for acquisition of property, plant and equipment

9,706

26,884

Deposits

985

891

Other tax payables

13,105

20,935

Salaries, bonuses and staff welfare benefits payable

12,509

21,828

Due to related parties (Note 26(c))

2,804

1,326

Dividends payable

77,339

-

Others

16,976

18,363

133,424

90,227

Other payables of the Group are unsecured, non-interest-bearing and have no fixed terms of repayment.

51

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

20. INTEREST-BEARING BANK AND OTHER BORROWINGS

30 June 2020

31 December 2019

Effective

Effective

interest rate

Maturity

RMB'000

interest rate

Maturity

RMB'000

(Unaudited)

(Audited)

Current

4.02%-4.35%

2020-2021

80,763

Bank borrowings - unsecured

4.35%

2020

10,715

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Analysed into:

Within one year

80,763

10,715

80,763

10,715

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Interest-bearing bank and other borrowings denominated in

- RMB

80,763

10,715

80,763

10,715

The Group's interest-bearing bank and other borrowings are all with fixed interest rates.

52

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

21. SUPPLEMENTAL BENEFIT OBLIGATIONS

According to relevant local regulation, the Group has a defined benefit plan to pay for supplemental medical insurance for approximately 58 (for the year ended 31 December 2019: 70) of its employees for the six months ended 30 June 2020. The Group has a defined benefit plan to pay for heat supply and other subsidies for approximately 757 (for the year ended 31 December 2019: 789) employees for the six months ended 30 June 2020.

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Consolidated statements of financial position:

10,008

Present value of supplemental benefit obligations

9,808

Less: Current portion

(417)

(617)

Non-current portion

9,591

9,191

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Consolidated statement of profit or loss and other

comprehensive income:

Remeasurement of supplemental benefit obligations

- Loss from change in actuarial assumptions

-

183

53

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

22. DEFERRED INCOME

The Group's deferred income represents government grants, which are related to assets.

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

At the beginning of period

32,442

23,325

Additions

2,323

11,564

Amortised during the period

(1,309)

(2,447)

At the end of period

33,456

32,442

Less: Portion classified as current liabilities

(2,931)

(2,555)

Non-current portion

30,525

29,887

23. SHARE CAPITAL

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Ordinary shares, issued and fully paid

350,000

350,000,000 domestic state-owned ordinary shares of RMB1.00 each

350,000

116,700,000 H Shares of RMB1.00 each

116,700

116,700

466,700

466,700

All shareholders are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders' meetings of the Company. All shares rank equally with regard to the Company's residual assets.

54

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

24. RESERVES

  1. Capital reserve

Capital reserve includes share premium and other capital reserve.

Other capital reserve mainly represents the difference between the total amount of the nominal value of shares issued and the amount of the net assets injected by the equity shareholders before the initial public offering in 2019.

  1. Statutory reserve fund

In accordance with the PRC Company Law and the Company's articles of association, the Company is required to appropriate 10% of its profit after tax as determined in accordance with Accounting Standards for Business Enterprises of the PRC and regulations applicable to the Company to the statutory surplus reserve until such reserve reaches 50% of the registered capital of the Company. The appropriation to the reserve must be made before any distribution of dividends to equity holders. The statutory surplus reserve can be used to offset previous years' losses, if any, and part of the statutory surplus reserve can be capitalized as the Company's share capital, provided that the remaining amount of such reserve after the capitalization shall not be less than 25% of the share capital of the Company.

  1. Safety fund

The safety fund represents the safety production fund, which is accrued based on revenue last year in accordance with the circular of the Ministry of Finance on the enterprise safety production.

55

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

25. COMMITMENTS AND LEASE ARRANGEMENTS

  1. Capital commitments

There was no capital commitment as at 30 June 2020 and 31 December 2019.

  1. Operating lease arrangements - As lessor

The Group leased out its investment properties under operating lease arrangements, with negotiation for terms ranging from one to fifteen years. At the end of each reporting period, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Within one year

150

100

After one year and within five years

400

400

After five years

708

758

1,258

1,258

26. RELATED PARTY TRANSACTIONS

  1. In addition to the transactions disclosed elsewhere in these condensed consolidated financial statements, the Group had the following transactions with related parties during the reporting period:

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Provision of services to

A joint venture of the Company

- Xixing Energy

46

-

Fellow subsidiaries

- Changre Group Jilin Changtie Public Utilities Co., Ltd.

916

809

- Inner Mongolia ChangRe Heating Group Co. Ltd.

42

-

- Jilin Heating Group Tumen Public Enterprise Co., Ltd.

4,002

-

- Changchun Yatai Heat Inglis Co., Ltd.

6,053

-

- Changchun Light Railway Heating Company Co., Ltd.

3,410

-

The Shareholder

- Changchun Heating Group

2,890

7,955

17,359

8,764

56

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

26. RELATED PARTY TRANSACTIONS (CONTINUED)

  1. In addition to the transactions detailed elsewhere in these condensed consolidated financial statements, the Group had the following transactions with related parties during the reporting period (Continued):

For the six months ended 30 June

2020

2019

RMB'000

RMB'000

(Unaudited)

(Unaudited)

Purchases of products from

Associates of the Shareholder

- Jilin Province New Model Pipes Co., Ltd.

12,681

377

- Jilin Heating Intelligent Equipment Co., Ltd.

-

3,261

12,681

3,638

Rental expense-short term

The Shareholder

- Changchun Heating Group

171

171

  1. Other transactions with related parties
    In 2018, the Group entered into two lease agreements of office with its shareholder, Changchun Heating Group, for which right-of-use assets of RMB1,980,000 were recognized. The depreciation of right-of-use assets amounting to RMB348,000 was recognized for the six months ended 30 June 2020 (six months ended 30 June 2019: RMB330,000).
    The directors of the Company are of the opinion that the above transactions with related parties disclosed in (a) and (b) were conducted in the ordinary course of business and on normal commercial terms or in accordance with the agreements governing such transactions.

57

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

26. RELATED PARTY TRANSACTIONS (CONTINUED)

  1. Outstanding balances with related parties
    The Group's balances with its related parties are as follows:

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Trade receivables due from

Fellow subsidiaries

- Jilin Heating Group Tumen Public Enterprise Co., Ltd.

3,291

-

- Changre Group Jilin Changtie Public Utilities Co., Ltd.

-

20

- Changchun Yatai Heat Inglis Co., Ltd.

9,785

647

- Changchun Light Railway Heating Company Co., Ltd.

48,267

-

- Jilin Heating Group Public Utilities Co., Ltd.

925

-

- Jilin Heating Group Panshi Public Enterprise Co., Ltd.

759

-

The Shareholder

- Changchun Heating Group

9,730

11,453

72,757

12,120

Other receivables due from

A fellow subsidiary

- Jilin Heating Group Public Utilities Co., Ltd.

15

-

The Shareholder

- Changchun Heating Group

116

51

131

51

58

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

26. RELATED PARTY TRANSACTIONS (CONTINUED)

  1. Outstanding balances with related parties (Continued)
    The Group's balances with its related parties are as follows (Continued):

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Contract assets due from

Fellow subsidiaries

- Changchun Yatai Heat Inglis Co., Ltd.

75

-

- Changchun Light Railway Heating Company

29,795

-

- Jilin Heating Group Tumen Public Enterprise Co., Ltd.

-

1,110

The Shareholder

- Changchun Heating Group

6,384

18,032

36,254

19,142

Trade payables due to

Associates of the Shareholder

- Jilin Province New Model Pipes Co., Ltd.

13,825

11,629

- Jilin Heating Intelligent Equipment Co., Ltd.

2,286

5,105

The Shareholder

- Changchun Heating Group

171

341

A joint venture of the Company

- Jilin Hengxin Electricity Co. Ltd.

-

1,074

16,282

18,149

Contract liabilities due to

Fellow subsidiaries

- Jilin Heating Group Tumen Public Enterprise Co., Ltd.

6,053

7,938

- Changchun Yatai Heat Inglis Co., Ltd.

-

89,929

- Changre Group Jilin Changtie Public Utilities Co., Ltd.

59

-

- Changchun Light Railway Heating Company

208

-

6,320

97,867

59

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

26. RELATED PARTY TRANSACTIONS (CONTINUED)

  1. Outstanding balances with related parties (Continued)
    The Group's balances with its related parties are as follows (Continued):

30 June

31 December

2020

2019

RMB'000

RMB'000

(Unaudited)

(Audited)

Other payables due to

A fellow subsidiary

- Jilin Province Heating Group Limited

53

53

- Changchun Light Railway Heating Company

30

-

Associates of the Shareholder

- Jilin Province New Model Pipes Co., Ltd.

1,426

-

- Jilin Heating Intelligent Equipment Co., Ltd.

125

125

The Shareholder

- Changchun Heating Group

1,170

1,148

2,804

1,326

Lease liabilities due to

The Shareholder

- Changchun Heating Group

160

680

Related party balances, including trade receivables due from related parties, contract assets due from related parties, prepayments due from related parties, and trade payables due to related parties are trade in nature.

Related party balances, including other receivables due from related parties, other payables due to related parties and other borrowings due to related parties, are non-trade in nature.

  1. Transactions with other government-related entities in the PRC
    The Company is a state-controlled entity and operates in an economic regime currently dominated by entities directly or indirectly owned or controlled by the PRC government and numerous government authorities and agencies (collectively referred to as "government-related entities"). Changchun Heating Group, the parent of the Company and the ultimate holding company of the Company, is a PRC state-owned enterprise and these government-related entities are also considered as related parties of the Group in this respect.

60

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

26. RELATED PARTY TRANSACTIONS (CONTINUED)

  1. Transactions with other government-related entities in the PRC (Continued)
    Apart from the transactions with Changchun Heating Group mentioned above, the Group also conducts some business activities with government-related entities in the ordinary course of business. These transactions are carried out on terms similar to those that would be entered into with non-government-related entities. Transactions with other government-related entities include but are not limited to the following:
    • Provision and distribution of heat;
    • Maintenance and construction services;
    • Purchase of heating resource; and
    • Depositing and borrowing money.

The tariff of heat supply is regulated by the relevant government authorities. The Group prices its other services and products based on commercial negotiations. The Group has also established its approval processes for the provision and distribution of heat, purchase of products and services and its financing policy for borrowings. Such approval processes and financing policy do not depend on whether the counterparties are government-related entities or not.

Having considered the potential for transactions to be impacted by related party relationships, the Group's approval processes and financing policy, and what information would be necessary for an understanding of the potential effect of the relationships on the financial statements, the directors of the Company are of the opinion that further information about the following transactions that are collectively significant is required for disclosure:

  1. The Group deposits most of its cash in government-related financial institutions, and also obtains short-term and long-term loans from these financial institutions in the ordinary course of business. The interest rates of the bank deposits and loans are regulated by the People's Bank of China.
  2. Revenue from the provision and distribution of heat and construction and maintenance services to the companies which are government-related entities accounted for 36% of the total revenue for the six months ended 30 June 2020 (six months ended 30 June 2019: 29%).
  3. Significant transactions with government-related entities also included a large portion of heat procurement amounting to RMB252,977,000 for the six months ended 30 June 2020 (six months ended 30 June 2019: RMB245,346,000).
  4. For the six months ended 30 June 2020, the Group principally derived the revenue for the construction, maintenance and design services from China Railway Ninth Bureau Group Fourth Engineering Co., Ltd. (中鐵九局集團第四工程有限公司) and Jilin University (吉林大學) amounting to RMB57,516,000. For the six months ended 30 June 2019, the Group principally derived the revenue for the construction, maintenance and design services from China Construction Third Engineering Bureau Co. Ltd. (中建三局集團有限公司) and China Railway Ninth Bureau Group Fourth Engineering Co., Ltd. (中鐵九局集團第四工程有限公司) amounting to RMB80,984,000.

61

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

27. BUSINESS COMBINATION

The Company and Changchun FAWSN Group Co., Ltd ("Changchun FAWSN") held 50% of the shares of Xixing Energy, respectively. According to the articles of association of Xixing Energy, the Group has joint control over Xixing Energy which was accounted for as a joint venture accordingly.

On 11 June 2020, the Company acquired 50% shares in Xixing Energy from Changchun FAWSN as part of the Group's strategy to expand its market share of heating industry. The purchase consideration for the acquisition was in the form of cash, with a total of RMB52 million paid on 9 June 2020 and 15 June 2020.

Upon completion of the transaction, the Company held 100% of Xixing Energy's shares in total. The directors of the Company considered that the Company obtains control over Xixing Energy and has consolidated Xixing Energy's financial position and performance into the Group's condensed consolidated financial statements since the acquisition date of 11 June 2020.

11 June 2020

Fair value

RMB'000

(Unaudited)

Assets

34,381

Property, plant and equipment

Intangible assets

121

Right-of-use assets

2,515

Inventories

3,273

Trade and bills receivables

11,215

Prepayments and other receivables

5,668

Financial assets at fair value through profit or loss

50,632

Cash and cash equivalents

21,808

Liabilities

(9,195)

Deferred tax liabilities

Deferred income

(2,323)

Contract liabilities

(214)

Tax payable

(735)

Other payables and accruals

(2,876)

Trade payables

(4,015)

Dividend payable

(5,305)

Net assets

104,950

Non-controlling interests

-

Share of net assets acquired

104,950

Gains on acquisition

(950)

Satisfied by:

52,000

Cash

Fair value of previously held equity interest

52,000

104,000

62

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

27. BUSINESS COMBINATION (CONTINUED)

Details of the 50% equity interest held by the Group before the acquisition of Xixing Energy and the profit from the investment are as follows:

11 June 2020

Fair Value

RMB'000

(Unaudited)

Initial investment cost

63,557

Share of profit accumulated under the equity method

3,265

Share of changes in reserves under the equity method

(2,291)

Cash dividends declared

(8,194)

Book value of the investment in 50% equity of Xixing Energy on the acquisition date

56,337

Fair value of the investment in 50% equity of Xixing Energy on the acquisition date (Note)

52,000

Loss on previously held equity interest remeasured at fair value on the acquisition date

(4,337)

Note: The fair value was determined by the valuation report issued by an independent qualified valuer.

An analysis of the cash flows in respect of the acquisition of Xixing Energy is as follows:

RMB'000

(Unaudited)

Cash consideration

(52,000)

Cash and bank balances acquired

21,808

Net outflow of cash and cash equivalents included in cash flows from investing activities

(30,192)

The operating results and cash flows of Xixing Energy since the acquisition date to 30 June 2020 are as follows:

RMB'000

(Unaudited)

Revenue

291

Loss for the period

(1,431)

Net cash out flows

(7,067)

Had the combination taken place at the beginning of the year, the revenue from continuing operations of the Group and the loss of the Group for the period would have been RMB673,656,000 and RMB90,957,000, respectively.

63

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

28. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

All assets and liabilities for which fair value is measured or disclosed in the condensed consolidated financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1

-

Based on quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2

-

Based on valuation techniques for which the lowest level input that is significant to the fair value

measurement is observable, either directly or indirectly

Level 3

-

Based on valuation techniques for which the lowest level input that is significant to the fair value

measurement is unobservable.

The carrying amounts and fair values of the Group's financial instruments, other than those with carrying amounts that reasonably approximate to fair values and those carried at fair value, are as follows:

30 June 2020

31 December 2019

Carrying

Carrying

amounts

Fair values

amounts

Fair values

RMB'000

RMB'000

RMB'000

RMB'000

(Unaudited)

(Unaudited)

(Audited)

(Audited)

Financial liabilities

Interest-bearing bank and other

borrowings

80,763

80,763

10,715

10,715

Management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, financial assets included in prepayments and other receivables, and financial liabilities included in other payables and accruals approximate to their carrying amounts largely due to the short term maturities of these instruments.

At the end of each reporting period, the finance department analyzes the movements in the values of financial instruments.

The fair values of the interest-bearing bank and other borrowings have been calculated by discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk and remaining maturities. The Group's own non-performance risk for interest-bearing bank and other borrowings at the end of each reporting period was assessed to be insignificant.

64

NOTES TO INTERIM CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

For the six months ended 30 June 2020

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

28. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

(CONTINUED)

Fair value hierarchy

The following illustrates the fair value measurement hierarchy of the Group's financial instruments:

Assets measured at fair value

The following tables illustrate the fair value measurement hierarchy of the Group's financial instruments:

Quoted

30 June 2020 (Unaudited)

31 December 2019(Audited)

Quoted

prices in

Significant

Significant

prices in

Significant

Significant

active

observable

unobservable

active

observable

unobservable

markets

inputs

inputs

Total

markets

inputs

inputs

Total

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

Financial assets at fair value

through profit or loss

50,763

-

-

50,763

-

-

-

-

Bills receivable

-

4,655

-

4,655

-

-

-

-

50,763

4,655

-

55,418

-

-

-

-

Liabilities measured at fair value

The Group did not have any financial liabilities measured at fair value at the end of the reporting period.

During the period/year ended 30 June 2020/31 December 2019, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3 for both financial assets and financial liabilities. The Group's policy is to recognize transfers between levels of the fair value hierarchy as at the end of the reporting period in which they occur.

29. EVENTS AFTER THE REPORTING PERIOD

There are no significant reportable events or transactions incurred after the reporting period and up to the date of approval of the interim condensed consolidated financial information.

30. APPROVAL OF THE INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The interim condensed consolidated financial information of the Group for the six months ended 30 June 2020 was approved and authorized for issue by the board of directors on 21 August 2020.

65

GLOSSARY

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

"Articles" or "Articles of Association"

"Board"

"Changchun Heating Group"

"China" or "PRC"

"Company", "we", "us", or "our"

"Corporate Governance"

"Director(s)" "Domestic Share(s)"

"Group"

"H Share(s)"

"heat service area"

"Hong Kong"

"Hong Kong dollars" or "HK$"

"Hong Kong Stock Exchange" or "Stock Exchange"

"IFRS"

"Listing"

the articles of association of the Company, as amended, modified or otherwise supplemented from time to time

the board of Directors of the Company

Changchun Heating Power (Group) Company Limited* (長春市熱力(集團)有限 責任公司), the controlling Shareholder of the Company

the People's Republic of China, excluding, for the purpose of this report, Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

Jilin Province Chuncheng Heating Company Limited* (吉林省春城熱力股份有 限公司) (stock code: 1853), which was incorporated in the PRC on 23 October 2017 and is a joint stock limited liability company

the Corporate Governance Code and Corporate Governance Report contained in Appendix 14 to the Listing Rules

the director(s) of the Company

domestic ordinary share(s) in the Company's registered capital with a nominal value of RMB1.00 each, which are subscribed for and paid up in RMB and held by PRC nationals or PRC incorporated entities, and are not listed or traded on any stock exchange

the Company and its subsidiaries

the ordinary share(s) in issue in the share capital of the Company with a nominal value of RMB1.00 each, which are listed on the main board of the Hong Kong Stock Exchange

gross floor areas covered by heat supply, including both the heat service area which we fully and partially charge for our heat fees

the Hong Kong Special Administrative Region of the People's Republic of China

the lawful currency of Hong Kong

The Stock Exchange of Hong Kong Limited

International Financial Reporting Standards, which include standards, amendments and interpretations promulgated by the International Accounting Standards Board and the International Accounting Standards and interpretation issued by the International Accounting Standards Committee

the listing of the H Shares of the Company on the main board of the Hong Kong Stock Exchange

66

GLOSSARY

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

"Listing Rules"

the Rules Governing the Listing of Securities on the Hong Kong Stock

Exchange, as amended from time to time

"Model Code"

the Model Code for Securities Transactions by Directors of Listed Issuers

contained in Appendix 10 to the Listing Rules

"No.4 Cogeneration Plant"

Huaneng Jilin Energy Sales Co., Ltd.* (華能吉林能源銷售有限公司) and

Changchun thermal power plant of Huaneng Jilin Power Generation Co., Ltd.*

(華能吉林發電有限公司長春熱電廠 ), the wholly-owned subsidiary and branch

of Huaneng Jilin Power Generation Co., Ltd.* (華能吉林發電有限公司), which

are independent third parties and primarily engaged in power generation/

heat generation businesses, and where the context requires, the cogeneration

plant operated, individually or collectively by the above

"No. 5 Cogeneration Plant"

Jilin Electric Power Co., Ltd. Changchun Thermoelectricity Branch* (吉林電

力股份有限公司長春熱電分公司), principally engaged in electricity supply and

heat production, which is an independent third party

"Pipelines Company"

Jilin Province Changre Pipelines Transmission Company Limited* (吉林省長熱

管網輸送有限公司), a wholly-owned subsidiary of the Company

"Reporting Period"

the period from 1 January 2020 to 30 June 2020

"RMB"

the lawful currency of the PRC

"Shareholder(s)"

the shareholder(s) of the Company

"Share(s)"

ordinary share(s) in the capital of the Company with a nominal value of

RMB1.00 per share

"Supervisor(s)"

the supervisor(s) of the Company

"Three Supplies and Property

heat supply, water supply, electricity supply and property management

Management"

services

"Xixing Energy"

Jilin Province Xixing Energy Limited* (吉林省西興能源有限公司), previously

known as Changchun FAW Sihuan Kinetic Company Limited* (長春一汽四環動

能有限公司)

"%"

percentage

"*"

for identification purpose only

67

CORPORATE

INFORMATION

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

CORPORATE INFORMATION

Name in Chinese:吉林省春城熱力股份有限公司

Name in English: Jilin Province Chuncheng Heating

Company Limited*

Registered Address: No. 28, Block B Nanhu Road

Community, No. 998

Nanhu Road, Nanguan District,

Changchun City, Jilin Province, PRC

Headquarters/Principal

No. 28, Block B Nanhu Road

  Place of Business:

Community, No. 998

Nanhu Road, Nanguan

District, Changchun City,

Jilin Province, PRC

Place of Business

46/F, Hopewell Centre,

  in Hong Kong:

183 Queen's Road East

Wanchai, Hong Kong

Company's Website:

www.cc-tp.com.cn

Email:

ccrl-zqb@ccrljt.com

AUTHORIZED REPRESENTATIVES

Mr. XU Chungang

Mr. WAN Tao

AUDIT COMMITTEE

Mr. POON Pok Man (Chairman)

Mr. LIU Changchun

Mr. WANG Yuguo

REMUNERATION COMMITTEE

Mr. FU Yachen (Chairman)

Mr. XU Chungang

Mr. POON Pok Man

NOMINATION COMMITTEE

Mr. WANG Yuguo (Chairman)

Mr. YANG Zhongshi

Mr. FU Yachen

INFORMATION OF SHARES OF THE COMPANY

Stock Short Name:

CHUNCHENG HEAT

Stock Code:

1853

STRATEGY COMMITTEE

Mr. LIU Changchun (Chairman)

Mr. SHI Mingjun

Mr. WANG Yuguo

EXECUTIVE DIRECTORS

Mr. YANG Zhongshi (Vice Chairman of the Board)

Mr. SHI Mingjun

Mr. XU Chungang

Mr. LI Yeji

NON-EXECUTIVE DIRECTOR

Mr. LIU Changchun (Chairman of the Board)

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. WANG Yuguo

Mr. FU Yachen

Mr. POON Pok Man

SUPERVISORS

JOINT COMPANY SECRETARIES

Mr. WAN Tao

Mr. LEE Chung Shing (appointed on 14 August 2020) Ms. TONG Suet Fong (resigned on 14 August 2020)

H SHARE REGISTRAR

Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong

Mr. WANG Fenghua (Chairman)

Ms. WANG Xuejing

Ms. LI Xiaoling

68

CORPORATE

INFORMATION

JILIN PROVINCE CHUNCHENG HEATING COMPANY LIMITED I INTERIM REPORT 2020

AUDITOR

COMPLIANCE ADVISER

Ernst & Young

Messis Capital Limited

22/F, CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong

Room 1606, 16/F, Tower 2 Admiralty Centre

LEGAL ADVISERS

18 Harcourt Road, Admiralty

Hong Kong

as to Hong Kong law:

PRINCIPAL BANKS

Lau, Horton & Wise LLP

In Association with CMS Hasche Sigle,

Jilin Jiutai Rural Commercial Bank (Xinjia Branch)

Hong Kong LLP

Jilin Jiutai Rural Commercial Bank (Jingyue Branch)

8th Floor, Nexxus Building

Bank of Jilin Co., Ltd. (Changchun Technology Branch)

41 Connaught Road Central

Bank of China Co., Ltd. (Nanhu Road Branch)

Hong Kong

Bank of China Co., Ltd. (Jiefang Road Branch)

as to PRC law:

Bank of Communications Co., Ltd. (Chaoyang Branch)

Jilin ZhengJi Law Firm*

Bank of Jilin Co., Ltd. (Changchun FAW Branch)

(吉林正基律師事務所)

No.1 Fuzhi Road

Jingyue Economic Development Zone

Changchun City, Jilin Province, PRC

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Jilin Province Chuncheng Heating Co. Ltd. published this content on 22 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 September 2020 08:39:00 UTC