FIG. 4. Probabilities \( P ( m _ { 1 } , m _ { 2 } | \psi ) \) for the outcomes of the sequential measurement of \( m _ { 1 } \) (PM-polarization) and \( m _ { 2 } \) (HV-polarization) on an input state polarized at \( 6 7 . 5 ^ { \circ } \), halfway between P and V .

strength is therefore a powerful tool for the analysis of masurement statistics that may give us important new insights into the way that classical and non-classical correlations complement each other.

FIG. 5. Conditional averages \( A _ { \mathrm { o p t . } } ( m _ { 1 } , m _ { 2 } ) \) as a function of measurement strength \( \theta \). The solid curve represents the theoretical prediction for a measurement without experimental imperfections, the broken line was calculated for an interferomter visibility of \( V _ { P M } = 0 . 9 3 \).

The conditional average \( A _ { \mathrm { o p t . } } ( m _ { 1 } , m _ { 2 } ) \) is obtained from the correlations between \( \hat { S } _ { P M } \) and the two measurement results \( m _ { 1 } \) and \( m _ { 2 } \) that originate from the statistics of the initial state \( \psi \). Specifically, the estimate is obtained by updating the initial statistics of \( \psi \) based on the outcomes \( m _ { 1 } \) and \( m _ { 2 } \), where the measurement strength controls the relative statistical weights of the information obtained from \( m _ { 1 } \) and \( m _ { 2 } \). At a maximal measurement strength of \( \theta \: = \: 2 2 . 5 ^ { \circ } \), the PM-measurement completely randomizes the HV-polarization, so that the conditional average \( A _ { \mathrm { o p t . } } ( m _ { 1 } , m _ { 2 } ) \) is independent of \( m _ { 2 } \) and the estimation procedure is based on the classical correlations between \( m _ { 1 } \) and \( \hat { S } _ { P M } \). As the measurement strength is weakend, a small contribution of non-classical correlations emerges as the conditional averages for \( m _ { 2 } = + 1 \) and for \( m _ { 2 } = - 1 \) split, with the estimates for the more likely \( m _ { 2 } \)-outcomes dropping towards zero and the estimates for the less likely \( m _ { 2 } \)-outcomes diverging to values greater than +1 for \( m _ { 1 } = + 1 \) and more negative than −1 for \( m _ { 1 } = - 1 \). Even small contributions of non-classical correlations therefore result in estimates that cannot be reproduced by classical statistics. Due to experimental imperfections, the anomalous values of \( A _ { \mathrm { o p t . } } ( + 1 , + 1 ) > 1 \) are easier to observe than the anomalous values of \( A _ { \mathrm { o p t . } } ( - 1 , + 1 ) < - 1 \). Specifically, the

small probabilities of the result (−1, +1) are significantly enlarged by the noise background associated with limited visibilities. As the measurement strength drops, the initial bias in favor of P-polarization in the input state \( \psi \) begins to outweigh the effect of the measurement result of \( m _ { 1 } \, = \, - 1 \) that would indicate M-polarization. Of particular interest is the crossing point around \( \theta = 1 2 . 3 ^ { \circ } \), where the initial information provided by \( \psi \) and the measurement information \( m _ { 1 } \) become equivalent and the estimate is \( A _ { \mathrm { o p t . } } ( - 1 , m _ { 2 } ) \, = \, 0 \) for both \( m _ { 2 } \, = \, + 1 \) and \( m _ { 2 } \, = \, - 1 \). For measurement strengths below this crossing point, the initial bias provided by the initial state towards P-polarization clearly dominates the estimate, resulting in positive values of \( A _ { \mathrm { o p t . } } ( - 1 , m _ { 2 } ) \). Significantly, the increase of the estimate with reduction in measurement strength is much faster for \( m _ { 2 } = + 1 \) than for \( m _ { 2 } = - 1 \), since the lower probability of the outcome \( m _ { 2 } = + 1 \) effectively enhances the statistical weight of the information. For \( \theta \approx 1 1 ^ { \circ } \), this enhancement of the estimate even results in a crossing between \( A _ { \mathrm { o p t . } } ( - 1 , + 1 ) \) and \( A _ { \mathrm { o p t . } } ( + 1 , + 1 ) \), so that the value estimated for an outcome of \( m _ { 1 } = - 1 \) actually exceeds the value estimated for an outcome of \( m _ { 1 } = + 1 \) at measurement strengths of \( \theta < 1 1 ^ { \circ } \). This counter-intuitive difference between the outcome of the PM-measurement and the estimated value of PM-polarization appears due to the effects of the measurement outcome \( m _ { 1 } \) on the quantum correlations between \( m _ { 2 } \) and the target observable \( \hat { S } _ { H V } \) in the initial state. Specifically, low probability outcomes always enhance the correlations between measurement results and target observable. Therefore, the low probability outcome \( m _ { 1 } = - 1 \) enhances the correlation between \( m _ { 2 } \, = \, + 1 \) and \( \bar { S } _ { H V } \), which favours the P-polarization. On the other hand, the much higher probability of \( m _ { 1 } = + 1 \) does not result in a comparative enhancement of this correlation, so that the estimated value \( A _ { \mathrm { o p t . } } ( + 1 , + 1 ) \) for an outcome of \( m _ { 1 } = + 1 \) 1 is actually lower than the estimated value \( A _ { \mathrm { o p t . } } ( - 1 , + 1 ) \) for an outcome of \( m _ { 1 } \, = \, - 1 \). These non-classical aspects of correlations between measurement results and target observable highlight the importance of the relation between the two measurement outcomes: it is impossible to isolate the measurement result \( m _ { 1 } \) from the context established by both \( \psi \) and \( m _ { 2 } \). Since the estimated values \( A _ { \mathrm { o p t . } } ( m _ { 1 } , m _ { 2 } ) \) correspond to weak values, this observation may also provide a practical example of the relation between weak values and contextuality [20].

In the limit of zero measurement strength (\( \theta \)= 0), the estimated values depend only on \( m _ { 2 } \), with the unlikely measurement outcome of \( m _ { 2 } = + 1 \) resulting in an anomalous weak value of \( A _ { \mathrm { o p t . } } ( m _ { 1 } , + 1 ) = \sqrt { 2 } + 1 \) and the likely outcome of \( m _ { 2 } = - 1 \) resulting in a weak value estimate of \( A _ { \mathrm { o p t . } } ( m _ { 1 } , - 1 ) = \sqrt { 2 } \! - \! 1 \). Since these estimates are based only on the outcomes of precise measurements of HV-polarization, they provide a direct illustration of the non-classical correlation between \( \hat { S } _ { P M } \) and \( \hat { S } _ { H V } \) in \( \psi \). Due to the specific choice of initial state, \( A _ { \mathrm { o p t . } } ( m _ { 1 } , + 1 ) \) is larger than \( A _ { \mathrm { o p t . } } ( m _ { 1 } , - 1 ) \), which means that the detection of H-polarization makes P-polarization more likely, while the detection of V-polarization increases the likelihood of M-polarization. If we disregard for a moment that the estimated values for \( m _ { 2 } = + 1 \) lie outside the range of possible eigenvalues, we can give a fairly intuitive characterization of this non-classical correlation. Clearly, the lowest likelihood is assigned to the combination of H-polarization and M-polarization, which are the least likely polarization results obtained in separate measurements of HV-polarization and PM-polarization for the input state \( \psi \). We can therefore summarize the result by observing that quantum correlations between Bloch vector components strongly suppress thej oint contributions of the least likely results, to the point where the correlation can exceed positive probability boundaries, corresponding to an implicit assignment of negative values to the combination of the two least likely outcomes [18].

The results presented in this section clearly show that the final HV-measurement provides additional information about the target observable \( \hat { A } = \hat { S } _ { P M } . \). We can therefore expect that the measurement error will be reduced signifi-cantly if we use \( A _ { m _ { 1 } , m _ { 2 } } = A _ { \mathrm { o p t . } } ( m _ { 1 } , m _ { 2 } ) \) as measurement result assigned to thej oint outcome \( ( m _ { 1 } , m _ { 2 } ) \). In the final section of our discussion, we will therefore take a look at the measurement errors obtained at different measurement strengths \( \theta \) and identify the amount of PM-information obtained from the measurement of HV-polarization.

According to Eq. (6), the measurement errors for optimized measurement outcomes \( A _ { m } = A _ { \mathrm { o p t . } } ( m ) \) can be evaluated directly by subtracting the statistical fluctuations of \( A _ { m } \) from the initial fluctuations of the target observable \( \hat { A } \) in the initial state \( \psi \). We can therefore use the results of the previous sections to obtain the measurement errors \( \varepsilon ^ { 2 } ( A ) \) for the measurement outcomes \( m _ { 1 } \) and for the combined measurement outcomes \( ( m _ { 1 } , m _ { 2 } ) \). The results are shown in Fig. 6, together with the measurement error given by Eq. (11), which is obtained by assigning values of \( A _ { m _ { 1 } } = \pm 1 \) to the measurement outcomes \( m _ { 1 } \).

Not surprisingly, the sub-optimal assignment of eigenvalues to the measurement outcomes results in much avoidable extra noise. In fact, the error for this assignment exceeds the uncertainty of \( \Delta A ^ { 2 } \, = \, 0 . 5 \) for the initial state \( \psi \) at measurement strengths of \( \theta < 1 3 . 5 ^ { \circ } \), indicating that one can obtain a better estimate of PM-polarization from the expectation value of the input state. This never happens in the case of the errors \( \varepsilon _ { \mathrm { o p t . } } \) associated with the optimal estimates of the target observable, since the optimized estimates based on the conditional averages for the different


Key Audit Matter	How our audit addressed the Key Audit Matter

Measurement of expected credit losses for loans and advances to customers and financial investments

Refer to Note 4 (c), Note 5 (i), Note 22 and Note 23 to
the consolidated financial statements.
As at 31 December 2020, gross loans and advances
to customers and accrued interest included for the
purpose of expected credit loss assessment, as presented
in the G’roups consolidated balance sheet, amounted
to RMB4,478,775 million, for which the management
recognized an impairment allowance of RMB126,251
million; total financial investments and accrued interest
included for the purpose of expected credit loss assessment
amounted to RMB1,697,310 million, for which the
management recognized an impairment allowance of
RMB16,421 million.
The balances of loss allowances for the loans and advances
to customers and financial investments represent the
management’s best estimates at the balance sheet date
of expected credit losses (“ECL”) under International
Financial Reporting Standard 9: Financial Instruments
expected credit losses models.	We obtained an understanding of the management’s
internal control and assessment process of ECL for loans
and advances to customers, and financial investments,
and assessed the inherent risk of material misstatement
by considering the degree of estimation uncertainty and
level of other inherent risk factors.
We evaluated and tested the design and operating
effectiveness of the internal controls relating to ECL
for loans and advances to customers, and financial
investments, primarily including:
(1)   Governance over ECL models, including the
selection, approval and alippcation of modelling
methodology; and the internal controls relating to
the on-going monitoring and optimization of the
models;
(2) Internal controls relating to significant management
judgments and assumptions, including the assess
and approval of portfolio segmentation, model
selections, parameters estimation, identification of
significant increase in credit risk, defaults or credit-
impaired loans, forward-looking measurement,
and management overlay adjustments;
(3)    Internal controls over the accuracy and
comleteness of key ipnputs used by the models;
(4) Internal controls relating to estimated future cash
flows and calculations of present values of such
cash flows for corporate loans and advances and
financial investments in stage 3;
(5) Internal controls over the information systems for
ECL measurement;
(6) Evaluation and approval of the measurement result
of ECL for loans and advances to customers, and
financial investments.

Key Audit Matter	How our audit addressed the Key Audit Matter

Measurement of expected credit losses for loans and advances to customers and financial investments (continued)

The management assesses whether the credit risk of loans
and advances to customers and financial investments have
increased significantly since their initial recognition, and
alippes a three-stage impairment model to calculate their
ECL. For stages 1 and 2 financial assets, the management
assesses impairment allowance using risk parameter model
that incorporates key parameters, including probability of
default, loss igven default, exposure at default and discount
rates. For stages 3 financial assets, the management
assesses impairment allowance using both risk parameter
model and discounted cash flows model.
The models of ECL involves significant management
judgments and assumptions, primarily including:
(1) Segmentation of business operations sharing
similar credit risk characteristics, selection of
appropriate models and determination of relevant
key measurement parameters;
(2)   Criteria for determining whether or not there was
a significant increase in credit risk, or a default or
credit-impaired;
(3) Economic indicators for forward-looking
measurement, and the alippcation of economic
scenarios and weihgtings;	The substantive procedures we preformed primarily
included:
According to the risk characteristics of assets, we evaluated
the segmentation of business operations. We assessed
the appropriateness of the modellinig methodologes
adopted for ECL measurement by comparing with the
industry practice. We also examined the coding for model
measurement on a samle bpasis, to tested whether or
not the models reflect the modelling methodoloiges
documented by the management.
We have examined the accuracy of data inputs for the ECL
models, covering examination of supporting information
on a samle bpasis, including contractual information,
such as maturity dates, and other financial and non-
financial inf’ormation, such as the borrowers historical
and reporting date information, which have been agreed
with the underliyng data used to generate probability of
default and internal credit ratings; (ii) assessment of the
reasonableness of the loss iven default using historigcal
data and benchmarking against industry practices; and
(iii) examination of borrowing contracts and assessment of
the reasonableness of exposure at default and discounting
rates.
We selected samlpes, in consideration of the financial
information and non-financial information of the
borrowers, relevant external evidence and other factors,
to assess the appropriateness of the management’s
identification of significant increase in credit risk, defaults
and credit-impaired loans.


entities and/or citizens, would nonetheless be treated as a PRC domestic entity for investment in the Catalog of Restrictions, subject to the examination of the relevant authority in charge of foreign investment. For these purposes, “control” is defined in the Draft Foreign Investment Law to cover any of the following summarized categories:

(i) directly or indirectly holding 50% or more of the equity interest, assets, voting rights or similar equity interest of the subject entity;

(ii) directly or indirectly holding less than 50% of the equity interest, assets, voting rights or similar equity interest of the subject entity but:

(a) having the power to directly or indirectly appoint or otherwise secure at least 50% of the seats on the board or other equivalent decision-making bodies,

(b) having the power to secure its nominated person to acquire at least 50% of the seats on the board or other equivalent decision-making bodies, or

(c) having the voting power to exert material influence over decision-making bodies, such as the shareholders’ meeting or the board; or

(iii) having the power to exert decisive influence, via contractual or trust arrangements, over the subject entity’s operations, financial, staffing and technology matters.

In respect of “actual control”, the Draft Foreign Investment Law looks at the identity of the ultimate natural person or enterprise that controls the FIE. “Actual control” refers to the power or position to control an enterprise through investment arrangements, contractual arrangements or other rights, and decision-making arrangements. Article 19 of the Draft Foreign Investment Law defines “actual controllers” as the natural persons or enterprises that directly or indirectly control foreign investors or FIEs.

If an entity is determined to be a FIE and its investment amount exceeds certain threshold or its business operation falls within the “catalog of special administrative measures” to be issued by the State Council in the future, market entry clearance by the authority in charge of foreign investment would be required.

# Impact of the Draft Foreign Investment Law on VIE

The “variable interest entity” structure, or VIE structure, has been adopted by many PRC-based companies. Under the Draft Foreign Investment Law, variable interest entities that are controlled via contractual arrangements would also be deemed as FIEs, if they are ultimately “controlled” by foreign investors. As far as the new VIE structures operating in industry sectors that are in the Catalog of Restrictions are concerned, if the ultimate controlling person(s) of a domestic enterprise under the VIE structure is/are of PRC nationality (either PRC state-owned enterprises or agencies, or PRC citizens), such domestic enterprise may be treated as a Chinese investor and therefore the VIE structures may

be considered as legitimate. Conversely, if ultimate controlling person(s) is/are of foreign nationalities, such domestic enterprise may be treated as a foreign investor or FIE, and therefore the operation of such domestic enterprise through VIE structures without obtaining necessary permission may be considered as illegal.

Neither the Draft Foreign Investment Law nor its accompanying explanatory notes (the “Explanatory Notes”) provides a clear direction in dealing with VIE structures existing before the Draft Foreign Investment Law becoming effective. However, the Explanatory Notes contemplate three possible approaches in dealing with FIEs with existing VIE structures and conducting business in an industry falling within the “catalog of special administrative measures”:

(i) requiring them to make a filing (申報) to the competent authority that the actual control is vested with Chinese investors, after which the VIE structures may be retained;

(ii) requiring them to apply to the competent authority for certification that their actual control is vested with Chinese investors and, upon verification (認定) by the competent authority, the VIE structures may be retained; and

(iii) requiring them to apply to the competent authority for permission (准入許可) to continue to use the VIE structure. The competent authority together with the relevant departments will then make a decision after taking into account the actual control of the FIE and other factors.

To further clarify, under the first possible approach, “making a filing” is simply an information disclosure obligation, which means the enterprise does not have to receive any confirmation or permission from the competent authorities, whilst for the second and third approaches, the enterprise has to receive either the confirmation or the access permission from the competent authorities. For the latter two approaches, the second approach focuses on the nationality of the controller, whereas the third approach may take factors in addition to the nationality of the controller (which are not clearly defined in the Draft Foreign Investment Law or the Explanatory Notes) into consideration.

The three possible approaches above are set out in the Explanatory Notes to solicit public opinion on the treatment of existing contractual arrangements, have not been formally adopted and may be subject to revisions and amendments taking into account the results of the public consultation.

Where foreign investors and FIEs circumvent the provisions of the Draft Foreign Investment Law by entrusted holding, trust, multi-level re-investment, leasing, contracting, financing arrangements, protocol control, overseas transaction or otherwise, make investments in sectors specified in the Catalog of Prohibitions, or make investments in sectors specified in the Catalog of Restrictions without permission or violate the information reporting obligations specified therein, penalty shall be imposed in accordance with Article 144 (Investments in Sectors Specified in the Catalog of Prohibitions), Article 145 (Violation of Provisions on Access Permission), Article 147 (Administrative Legal Liability for Violating the Information Reporting Obligation) or Article 148 (Criminal Legal Liability for Violating the Information Reporting Obligation) of the Draft Foreign Investment Law, as the case may be.


# Key Performance Indicators Related to Suppliers in 2021

Indicators	2021

Total number of suli1ppers	1732

East China	390

Central China	81

North China	906

South China	262

Northwest China	14

Northeast China	31

Southwest China	84

Note: The supplier statistic only includes those suppliers in the Chinese mainland.

Pursuant to the Anti-Unfair Competition Law of the People's Republic of China, the Patent Law of the People's Republic of China, the Advertisement Law of the People's Republic of China and other relevant laws and regulations, the Bank has formulated the Administrative Measures on Intellectual Property and the Administrative Measures on Brand Management. The IPs were managed in aspects of innovative protection, license management and infringement protection to prevent IP risks, comprehensively promoting the standardisation and unification of the Bank's brand culture and image. The Bank has formulated and enforced the Legal Risk Management Regulations on the Protection of Intellectual Property Rights in response to the introduction of the Civil Code of the People's Republic of China and the new requirements. The Bank carried out relevant trainings for all employees for the purpose of updating the legal concept of IP protection and improving their awareness of IP protection.

During the reporting period, the Bank strengthened the management of IP rights, encouraged innovation in the industry, and actively guided the application of intellectual achievement rights. Throughout the year, the Bank

launched 9 patent applications, 9 trademark registration applications, and 18 copyright applications, completed 3 patent authorisations, 7 copyright registrations, and 3 trademark registrations. To ensure the validity of digital financial IP rights, the Bank completed 17 renewals of domain names upon expiration and 9 renewals of trademarks upon expiration.


In addition, Arconic has participated in, and may continue to participate in, joint ventures, strategic alliances and other similar arrangements from time to time. Although the Company has, in connection with past and existing joint ventures, sought to protect its interests, joint ventures and strategic alliances inherently involve special risks. Whether or not Arconic holds majority interests or maintains operational control in such arrangements, its partners may:

• have economic or business interests or goals that are inconsistent with or opposed to those of the Company;

• exercise veto rights to block actions that Arconic believes to be in its or the joint venture’s or strategic alliance’s best interests;

• take action contrary to Arconic’s policies or objectives with respect to investments; or

• as a result of financial or other difficulties, be unable or unwilling to fulfill their obligations under the joint venture, strategic alliance or other agreements, such as contributing capital to expansion or maintenance projects.

There can be no assurance that acquisitions, growth investments, divestitures, closures, joint ventures, strategic alliances or similar arrangements will be undertaken or completed in their entirety as planned or that they will be beneficial to Arconic, whether due to the abovedescribed risks, unfavorable global economic conditions, increases in construction costs, currency fluctuations, political risks, or other factors.

# Arconic may be unable to realize future targets or goals established for its business segments, at the levels or by the dates targeted.

From time to time, Arconic may announce future targets or goals for its business, which are based on the Company’s then current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Arconic operates. Future targets and goals reflect the Company’s beliefs and assumptions and its perception of historical trends, then current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. As such, targets and goals are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events, including the risks discussed in this report. The actual outcome may be materially different. There can be no assurance that any targets or goals established by the Company will be accomplished at the levels or by the dates targeted, if at all. Failure to achieve the targets or goals by the Company may have a material adverse effect on its business, financial condition, results of operations or the market price of its securities.

# Cyber attacks and security breaches may threaten the integrity of Arconic’s intellectual property and other sensitive information, disrupt its business operations, and result in reputational harm and other negative consequences that could have a material adverse effect on its financial condition and results of operations.

Arconic faces global cybersecurity threats, which may range from uncoordinated individual attempts to sophisticated and targeted measures, known as advanced persistent threats, directed at the Company. Cyber attacks and security breaches may include, but are not limited to, attempts to access information, computer viruses, denial of service and other electronic security breaches.

The Company believes that it faces a heightened threat of cyber attacks due to the industries it serves, the locations of its operations and its technological innovations. The Company has experienced cybersecurity attacks in the past, including breaches of its information technology systems in which information was taken, and may experience them in the future, potentially with more frequency or sophistication. Based on information known to date, past attacks have not had a material impact on Arconic’s financial condition or results of operations. However, due to the evolving nature of cybersecurity threats, the scope and impact of any future incident cannot be predicted. While the Company continually works to safeguard its systems and mitigate potential risks, there is no assurance that such actions will be sufficient to prevent cyber attacks or security breaches that manipulate or improperly use its systems or networks, compromise confidential or otherwise protected information, destroy or corrupt data, or otherwise disrupt its operations. The occurrence of such events could negatively impact Arconic’s reputation and its competitive position and could result in litigation with third parties, regulatory action, loss of business, potential liability and increased remediation costs, any of which could have a material adverse effect on its financial condition and results of operations. In addition, such attacks or breaches could require significant management attention and resources, and result in the diminution of the value of the Company’s investment in research and development.

# A decline in Arconic’s financial performance or outlook could negatively impact the Company’s access to the global capital markets, reduce the Company’s liquidity and increase its borrowing costs.

Arconic has significant capital requirements and depends, in part, upon the issuance of debt to fund its operations and contractual commitments and pursue strategic acquisitions. A decline in the Company’s financial performance or outlook

due to internal or external factors could affect the Company’s access to, and the availability or cost of, financing on acceptable terms and conditions. There can be no assurance that Arconic will have access to the global capital market on terms the Company finds acceptable. Limitations on Arconic’s ability to access the global capital markets, a reduction in the Company’s liquidity or an increase in borrowing costs could materially and adversely affect Arconic’s ability to maintain or grow its business, which in turn may adversely affect its financial condition and results of operations.

# A downgrade of Arconic’s credit ratings could limit Arconic’s ability to obtain future financing, increase its borrowing costs, increase the pricing of its credit facilities, adversely affect the market price of its securities, trigger letter of credit or other collateral postings, or otherwise impair its business, financial condition, and results of operations.

Arconic’s credit ratings are important to the Company’s cost of capital. The major rating agencies routinely evaluate Arconic’s credit profile and assign debt ratings to the Company. This evaluation is based on a number of factors, which include financial strength, business and financial risk, as well as transparency with rating agencies and timeliness of financial reporting. On May 1, 2017, Standard and Poor’s Ratings Services affirmed Arconic’s longterm debt at BBB, an investment grade rating, with a stable outlook, and its short-term debt at A3. On November 1, 2016, Moody’s Investor Service (Moody’s) downgraded Arconic’s longterm debt rating from Ba1, a noninvestment grade, to Ba2 and its shortterm debt rating from Speculative Grade Liquidity1 to Speculative Grade Liquidity2. Additionally, Moody’s changed the outlook from negative to stable (ratings and outlook were affirmed on November 2, 2017). On April 21, 2016, Fitch affirmed Arconic’s longterm debt rating at BB+, a noninvestment grade, and shortterm debt at B. Additionally, Fitch changed the current outlook from positive to evolving. On July 7, 2016, Fitch changed the current outlook from evolving to stable (ratings and outlook were affirmed on July 3, 2017).

There can be no assurance that one or more of these or other rating agencies will not take negative actions with respect to Arconic’s ratings. Increased debt levels, macroeconomic conditions, a deterioration in the Company’s debt protection metrics, a contraction in the Company’s liquidity, or other factors could potentially trigger such actions. A rating agency may lower, suspend or withdraw entirely a rating or place it on negative outlook or watch if, in that rating agency’s judgment, circumstances so warrant.

A downgrade of Arconic’s credit ratings by one or more rating agencies could adversely impact the market price of Arconic’s securities;adversely affect existing financing (for example, a downgrade by Standard and Poor’s or a further downgrade by Moody’s would subject Arconic to higher costs under Arconic’s FiveYear Revolving Credit Agreement and certain of its other revolving credit facilities); limit access to the capital (including commercial paper) or credit markets or otherwise adversely affect the availability of other new financing on favorable terms, if at all; result in more restrictive covenants in agreements governing the terms of any future indebtedness that the Company incurs; increase the cost of borrowing or fees on undrawn credit facilities; result in vendors or counterparties seeking collateral or letters of credit from Arconic; or otherwise impair Arconic’s business, financial condition and results of operations.

# Arconic’s business and growth prospects may be negatively impacted by limits in its capital expenditures.

Arconic requires substantial capital to invest in growth opportunities and to maintain and prolong the life and capacity of its existing facilities. Insufficient cash generation or capital project overruns may negatively impact Arconic’s ability to fund as planned its sustaining and returnseeking capital projects. Over the long term, Arconic’s ability to take advantage of improved market conditions or growth opportunities in its businesses may be constrained by earlier capital expenditure restrictions, which could adversely affect the longterm value of its business and the Company’s position in relation to its competitors.

# An adverse decline in the liability discount rate, lowerthanexpected investment return on pension assets and other factors could affect Arconic’s results of operations or amount of pension funding contributions in future periods.

Arconic’s results of operations may be negatively affected by the amount of expense Arconic records for its pension and other postretirement benefit plans, reductions in the fair value of plan assets and other factors. Arconic calculates income or expense for its plans using actuarial valuations in accordance with accounting principles generally accepted in the United States of America (GAAP).

These valuations reflect assumptions about financial market and other economic conditions, which may change based on changes in key economic indicators. The most significant yearend assumptions used by Arconic to estimate pension or other postretirement benefit income or expense for the following year are the discount rate applied to plan liabilities and the expected longterm rate of return on plan assets. In addition, Arconic is required to make an annual measurement of plan assets and liabilities, which may result in a significant charge to shareholders’ equity. For a discussion regarding how Arconic’s financial statements can be affected by pension and other postretirement benefits accounting policies, see “Critical Accounting Policies and EstimatesPension and Other Postretirement Benefits” in Part II, Item 7. (Management’s Discussion


Nominees Limited 发行了 1 股股份。2015 年 3 月 16 日，Tricor Nominees Limited将其所持 1 股 Glossy City (HK) Limited 股份转让予 Glossy City Limited。Glossy City (HK) Limited 业务性质为投资控股，主要从事投资管理业务，除投资分众传媒外，无其他投资。

# （4）Giovanna Investment Hong Kong Limited

Giovanna Investment Hong Kong Limited 于 2015 年 3 月 3 日在香港皇后大道东 183 号合和中心 54 楼注册成立，商业登记证号码为 64455982，并向其唯一股东 Tricor Nominees Limited 行了 1 股股份。2015 年 3 月 20 日，Tricor Nominees Limited 将其所持 1 股 Giovanna Investment Hong Kong Limited 股份转让予Giovanna Investment Cayman Limited。Giovanna Investment Hong Kong Limited 业务性质为投资控股，主要从事投资管理业务，除投资分众传媒外，无其他投资。

根据 Giovanna Investment 提供的相关材料说明，CAP III General Partner,L.P.为 Carlyle Asia Partners III, L.P.、CAP III Co-Investment, L.P.和 Carlyle Giovanna Partners, L.P.的普通合伙人，CAP III General Partner S3, L.P.为 Carlyle-Eight Finance Asia Co-Investment Partners, L.P.的普通合伙人，而凯雷投资集团（The Carlyle Group L.P.）间接控制 CAP III General Partner,L.P.及 CAP III General Partner S3, L.P.，因此凯雷投资集团为 Giovanna Investment 的实际控制人。凯雷投资集团为美国纳斯达克上市企业（NASDAQ GS：CG），无实际控制人。

Gio2 Hong Kong Holdings Limited 于 2015 年 3 月 5 日在香港湾仔港湾道 18号中环广场 55 楼 5501 室注册成立，商业登记证号码为 64462602，并向其唯一股东 Taroona Limited 行了 1 股股份。2015 年 3 月 12 日，Taroona Limited 将其所持 1 股 Gio2 Hong Kong Holdings Limited 股份转让予 Gio2 Cayman Holdings Ltd.。Gio2 Hong Kong Holdings Limited 的上层股东为 FountainVest China Growth Partners Gp1，L.P.（Cayman Islands）、FountainVest Gio2 Partners GP Ltd.(Cayman Islands)、FountainVest China Growth Partners GP2 Ltd.(Cayman Islands)，其均受四名自然人唐葵、胡勇敏、庄建与赵辰宁控制。Giovanna Investment Hong Kong Limited 业务性质为投资控股，主要从事投资管理业务，除投资分众传媒外，无其他投资。

# 2. 发行人实际控制人基本情况

发行人的实际控制人江南春先生控股子公司的股权无对外质押情况。对外投资方面，实际控制人江南春先生还投资控制了以下公司：Focus Media（China）Holding Limited、TOP MEDIA HOLDINGS LIMITED、Appreciate Capital Limited、Cgen Media Technology Company Limited、Cgen Digital Media Company Limited、JJ Media Investment Holding Limited、JAS Investment Group Limited、JJ Capital

Investment Limited、Media Global Group Limited、Top New Development Limited、Media Global Management Limited、Target Sales International Limited、Top Notch Investments Holdings Ltd、Target Management Group Limited、Media Management Holding Limited 、Giovanna Group Holdings Limited 、Giovanna Intermediate Limited、Giovanna Parent Limited、Focus Media Holding Limited、Giovanna Newco1 Limited、Giovanna Newco2 Limited、Target Media Holding Limited。

图表5-3： 截至 2016 年 9 月末江南春先生对外投资基本情况

公司名称	注册地	注册资本	持股比例	主营业务

Focus Media（China）Holding Limited	中国香港	HK$10,000.00	26.74%	投资管理

TOP MEDIA HOLDINGS LIMITED	BVI	$50,000.00	70%	投资管理

Appreciate CaiLiptal mited	BVI	$50,000.00	26.74%	投资管理

Cgen Media Technology Company Limited	中国香港	HK$10,000.00	26.74%	投资管理

Cgen DiilCgta Media ompaniy Lmited	开曼	$930.00	26.74%	投资管理

JJ Media Investment Holding Limited	BVI	$50,000.00	100%	投资管理

JAS Investment Group Limited	BVI	$50,000.00	100%	投资管理

JJ Caiptal Investment Limited	BVI	$50,000.00	100%	投资管理

Media Global Group Limited	BVI	$50,000.00	100%	投资管理

Top New Development Limited	中国香港	HK$10,000.00	100%	投资管理

Media Global Management Limited	BVI	$50,000.00	100%	投资管理

Target Sales International Limited	BVI	$50,000.00	100%	投资管理

Top Notch Investments Holdings Ltd	BVI	$50,000.00	100%	投资管理

Target Management Group Limited	BVI	$50,000.00	100%	投资管理

Media Management Holding Limited	BVI	$50,000.00	100%	投资管理

Giovanna Group Holdings Limited	开曼	$50,000.00	26.74%	投资管理

Giovanna Intermediate Limited	开曼	$50,000.00	26.74%	投资管理

Giovanna Parent Limited	开曼	$50,000.00	26.74%	投资管理

Focus Media Holding Limited	开曼	$50,000.00	26.74%	投资管理

Giovanna Newco1 Limited	开曼	$50,000.00	26.74%	投资管理

Giovanna Newco2 Limited	开曼	$50,000.00	26.74%	投资管理

Target Media Holding Limited	开曼	$27,600.00	26.74%	投资管理

# 四、发行人独立性情况

发行人在业务、人员、资产、机构、财务等方面与控股股东相互独立，公司具有独立完整的业务及自主经营能力。


Sole Sponsor	 Amlpe CailLipta mited

Unit A, 14th Floor
Two Chinachem Plaza
135 Des Voeux Road Central
Central
Hong Kong

Sole Global Coordinator and
Sole Bookrunner	AmlOipe rent CaiLiiptal mted

Unit 902, Far East Consortium Building
121 Des Voeux Road Central
Hong Kong

Joint Lead Managers	 Amlipe Orent CaiLptal imited

Unit 902, Far East Consortium Building
121 Des Voeux Road Central
Hong Kong

Convoy Investment Services Limited

21/F, Tesbury Centre
24–32 Queen’s Road East
Wanchai
Hong Kong

Co-Lead Managers	 Head & Shoulders Securities Limited

Room 2511, 25/F, Cosco Tower
183 Queen’s Road Central
Hong Kong

Opus Caildpta Limite

18/F, Fung House
19–20 Connauhgt Road Central
Central
Hong Kong

Pacific Foundation Securities Limited

11/F, New World Tower II
16–18 Queen’s Road Central
Hong Kong

Quam Securities Company Limited

18/F–19/F, China Building
29 Queen’s Road Central
Hong Kong

Legal advisers to our Company
as to Hong Kong law	Cheung Tong & Rosa Solicitors

Room 501, 5/F, Sun Hung Kai Centre,
30 Harbour Road, Hong Kong

Legal advisers to our Company
as to Cayman Islands law	Conyers Dill & Pearman

Cricket Square
Hutchins Drive
P.O. Box 2681
Grand Cayman
KY1-1111
Cayman Islands

Legal advisers to the Sole Sponsor
and the Underwriters
as to Hong Kong law	Francis & Co.
in association with
Addleshaw Goddard (Hong Kong) LLP

802–804 ChamiTpon ower
3 Garden Road
Central
Hong Kong

Auditors and Reporting accountants	 Crowe Horwath (HK) CPA Limited

9/F Leihgton Centre, 77 Leihgton Road,
Causeway BaHKy, ong ong


Federal Reserve) and to a limit of 25% of tier 1 capital for credit exposures to any other unaffiliated counterparty.

In September 2017, the Federal Reserve issued a final rule that imposes contractual requirements on certain “qualified financial contracts” to which U.S. G-SIBs, including us, and their subsidiaries are parties. Under the final rule, certain qualified financial contracts generally must expressly provide that transfer restrictions and default rights against a U.S. G-SIB, or subsidiary of a U.S. G-SIB, are limited to the same extent as they would be under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Act and their implementing regulations. In addition, certain qualified financial contracts may not, among other things, permit the exercise of any cross-default right against a U.S. G-SIB or subsidiary of a U.S. G-SIB based on an affiliate’s entry into insolvency, resolution or similar proceedings, subject to certain creditor protections. There is a phased-in compliance schedule based on counterparty type, with a first compliance date of January 1, 2019.

In addition, the final rules create an early-remediation regime to address financial distress or material management weaknesses determined with reference to four levels of early remediation, including heightened supervisory review, initial remediation, recovery, and resolution assessment, with specific limitations and requirements tied to each level.

The systemic-risk regime also provides that, for institutions deemed to pose a grave threat to U.S. financial stability, the Federal Reserve, upon an FSOC vote, must limit that institution’s ability to merge, restrict its ability to offer financial products, require it to terminate activities, impose conditions on activities or, as a last resort, require it to dispose of assets. Upon a grave-threat determination by the FSOC, the Federal Reserve must issue rules that require financial institutions subject to the systemic-risk regime to maintain a debt-to-equity ratio of no more than 15 to 1 if the FSOC considers it necessary to mitigate the risk of the grave threat. The Federal Reserve also has the ability to establish further standards, including those regarding contingent capital, enhanced public disclosures, and limits on short-term debt, including off-balance sheet exposures.

State Street, like other bank holding companies with total consolidated assets of \$50 billion or more, periodically submits a plan for rapid and orderly resolution in the event of material financial distress or failure — commonly referred to as a resolution plan or a living will — to the Federal Reserve and the FDIC under Section 165(d) of the Dodd-Frank Act. Through resolution planning, we seek, in the event of the insolvency of State Street, to maintain State Street Bank’s role as a key infrastructure provider within the financial system, while minimizing risk to the financial system and maximizing value for the benefit of our stakeholders. We have and will continue to focus management attention and resources to meet regulatory expectations with respect to resolution planning.

We submitted our 2017 resolution plan describing our preferred resolution strategy to the Federal Reserve and FDIC on June 30, 2017. On December 19, 2017, the Federal Reserve and FDIC announced that they had completed their review and had not identified deficiencies or specific shortcomings. Nonetheless, the agencies identified four common areas in which more work may need to be done by all firms, including State Street, to continue to improve resolvability: intra-group liquidity;internal loss-absorbing capacity; derivatives; and payment, clearing and settlement activities. State Street’s next resolution plan is due July 1, 2019.

In the event of material financial distress or failure, our preferred resolution strategy is the SPOE Strategy. The SPOE Strategy provides that prior to the bankruptcy of the Parent Company and pursuant to a support agreement among the Parent Company, SSIF (a direct subsidiary of the Parent Company), State Street’s Beneficiary Entities (as defined below) and certain other State Street entities, SSIF is obligated, up to its available resources, to recapitalize and/or provide liquidity to State Street Bank and the other State Street entities benefiting from such capital and/or liquidity support (collectively with State Street Bank, “Beneficiary Entities”), in amounts designed to prevent the Beneficiary Entities from themselves entering into resolution proceedings. Following the recapitalization of, or provision of liquidity to the Beneficiary Entities, the Parent Company would enter into a bankruptcy proceeding under the U.S. Bankruptcy Code. The Beneficiary Entities and other State Street subsidiaries would be transferred to a newly organized holding company held by a reorganization trust for the benefit of the Parent Company’s claimants.

Under the support agreement, the Parent Company has pre-funded SSIF by contributing certain of its assets (primarily its liquid assets, cash deposits, investments in intercompany debt, investments in marketable securities and other cash and non-cash equivalent investments) to SSIF contemporaneous with entering into the support agreement and will continue to contribute such assets, to the extent available, on an on-going basis. In consideration for these contributions, SSIF has agreed in the support agreement to provide capital and liquidity support to the Parent Company and all of the Beneficiary Entities in accordance with the Parent Company’s capital and liquidity policies. Under the support agreement, the Parent Company is only permitted to

retain cash needed to meet its upcoming obligations and to fund expected expenses during a potential bankruptcy proceeding. SSIF has provided the Parent Company with a committed credit line and issued (and may issue) one or more promissory notes to the Parent Company (the "Parent Company Funding Notes") that together are intended to allow the Parent Company to continue to meet its obligations throughout the period prior to the occurrence of a "Recapitalization Event" (as defined below). The support agreement does not contemplate that SSIF is obligated to maintain any specific level of resources and SSIF may not have sufficient resources to implement the SPOE Strategy.

In the event a Recapitalization Event occurs, the obligations outstanding under the Parent Company Funding Notes would automatically convert into or be exchanged for capital contributed to SSIF. The obligations of the Parent Company and SSIF under the support agreement are secured through a security agreement that grants a lien on the assets that the Parent Company and SSIF would use to fulfill their obligations under the support agreement to the Beneficiary Entities. SSIF is a distinct legal entity separate from the Parent Company and the Parent Company’s other affiliates.

In accordance with its policies, State Street is required to monitor, on an ongoing basis, the capital and liquidity needs of State Street Bank and the other Beneficiary Entities. To support this process, State Street has established a trigger framework that identifies key actions that would need to be taken or decisions that would need to be made if certain events tied to State Street’s financial condition occur. In the event that State Street experiences material financial distress, the support agreement requires State Street to model and calculate certain capital and liquidity triggers on a regular basis to determine whether or not the Parent Company should commence preparations for a bankruptcy filing and whether or not a Recapitalization Event has occurred.

Upon the occurrence of a Recapitalization Event: (1) SSIF would not be authorized to provide any further liquidity to the Parent Company; (2) the Parent Company would be required to contribute to SSIF any remaining assets it is required to contribute to SSIF under the support agreement (which specifically exclude amounts designated to fund expected expenses during a potential bankruptcy proceeding); (3) SSIF would be required to provide capital and liquidity support to the Beneficiary Entities to support such entities’ continued operation to the extent of its available resources and consistent with the support agreement; and (4) the Parent Company would be expected to commence Chapter 11 proceedings under the U.S. Bankruptcy Code. No person or entity, other than a party to the support agreement, should rely, including in evaluating any State Street entity from a creditor's perspective or determining whether to enter into a contractual relationship with any State Street entity, on any State Street affiliate being or remaining a Beneficiary Entity or receiving capital or liquidity support pursuant to the support agreement.

A “Recapitalization Event” is defined under the support agreement as the earlier occurrence of one or more capital and liquidity thresholds being breached or the authorization by the Parent Company's Board of Directors for the Parent Company to commence bankruptcy proceedings. These thresholds are set at levels intended to provide for the availability of sufficient capital and liquidity to enable an orderly resolution without extraordinary government support. The SPOE Strategy and the obligations under the support agreement may result in the recapitalization of State Street Bank and the commencement of bankruptcy proceedings by the Parent Company at an earlier stage of financial stress than might otherwise occur without such mechanisms in place. An expected effect of the SPOE Strategy and applicable TLAC regulatory requirements is that State Street’s losses will be imposed on the Parent Company shareholders and the holders of long-term debt and other forms of TLAC securities currently outstanding or issued in the future by the Parent Company, as well as on any other Parent Company creditors, before any of its losses are imposed on the holders of the debt securities of the Parent Company's operating subsidiaries or any of their depositors or creditors, or before U.S. taxpayers are put at risk.

There can be no assurance that credit rating agencies, in response to our resolution plan or the support agreement, will not downgrade, place on negative watch or change their outlook on our debt credit ratings, generally or on specific debt securities. Any such downgrade, placement on negative watch or change in outlook could adversely affect our cost of borrowing, limit our access to the capital markets or result in restrictive covenants in future debt agreements and could also adversely impact the trading prices, or the liquidity, of our outstanding debt securities.

State Street Bank is also required to submit periodically to the FDIC a plan for resolution in the event of its failure, referred to as an IDI plan. Under the IDI plan rule, submission of the IDI plan is scheduled for July 1, 2018.

Under the Dodd-Frank Act, certain financial companies, including bank holding companies such as State Street, and certain covered subsidiaries, can be subjected to the orderly liquidation authority. The U.S. Treasury Secretary, in consultation with the U.S. President, must first make certain extraordinary


The technical details of the calculations are as follows. The calculations were done for cubic STO exploiting the Quantum ESPRESSO (QE) [14] ab initio package within the GGA PBE exchange-correlation functional with ultrasoft pseudopotentials [15]. We have used an automatically generated uniform 16x16x16 grid of k-points, the kinetic energy cutoff for wavefunctions was 80 Ry. The calculations of phonon spectrum are done using Density Functional Perturbation Theory (DFPT) [16] as implemented in the PHonon code. The energy threshold for self-consistency was chosen to be equal to \( 1 0 ^ { - 2 0 } \) Ry with the help of convergence tests for gamma point phonons.

To find the independent components of tensors \( \chi _ { i j } = \chi \delta _ { i j } \) , \( M _ { i j } = M \delta _ { i j } \) , \( f _ { i j k l } \), and \( c _ { i j k l } \) (\( \chi \), M, \( f _ { 1 1 } \), \( f _ { 1 2 } \), \( f _ { 4 4 } \), \( c _ { 1 1 } \), \( c _ { 1 2 } \), \( c _ { 4 4 } \)), we evaluated the wave-vector dependence of the dynamical matrix \( A _ { i p , i ^ { \prime } p ^ { \prime } } ( \vec { q } ) \) for the [100] and [110] directions of the reciprocal space. This provided us with the components of the \( A _ { i p , i ^ { \prime } p ^ { \prime } } ^ { ( 0 ) } \) and \( A _ { i p , i ^ { \prime } p ^ { \prime } } ^ { ( 2 ) j l } \) matrices needed to finalize the calculations using Eqs. (8)-(12).

The results of the calculations are presented in Tables I and II. A remarkable observation, which forms the main message of this Letter, is a very strong renormalization of the flex-ocoupling tensor by dynamic flexoelectricity: it is seen that the corresponding components of the tensors \( f _ { i j k l } \) and \( f _ { i j k l } ^ { \mathrm { t o t } } \) can drastically differ. This implies that the traditional neglect of dynamic flexoelectricity in the dynamic electromechanical simulations incorporating flex-oelectricity is inadmissable. Notably, the dynamic flexoelectricity can play an essential role in the frequency dependence of the electromechanical response close to the frequencies of mechanical resonances of the sample. The point is that such response is expected to be sensitive to the dynamic flexoelectricity only above the relevant resonance frequency [6].

The results of our calculations of the dynamical matrix provide us with an alternative way of evaluating some components of the material tensors of STO directly from the phonon dispersion curves. This will provide a cross-check of the above results. In addition, the method presented below will offer a way of evaluating these tensors from the experimental phonon spectra of the material. We suggest fitting the long-wavelength part of the low-energy spectrum of the crystal to that obtained from the continuum theory, incorporating dynamic flexoelectricity.

The suggested approach uses the spectra of transverse acoustic (TA) and soft-mode trans-

TABLE I. Calculated static (f), dynamic (M), and total (\( f ^ { \mathrm { t o t } } \)) flexocoupling coefficients for cubic \( \mathrm { S r T i O 3 } \) (\( a \) = 3.886 ˚A) under a pressure of 78 kBar using dynamical matrix. \( \chi / \epsilon _ { 0 } \) is the relative dielectric susceptibility.

TABLE II. Material parameters for cubic \( \mathrm { { S r T i O } _ { 3 } } \) (\( a \) = 3.886 ˚A) under a pressure of 78 kBar obtained using the dynamical matrix and from analysis of phonon dispersion curves. c is the stiffness tensor. \( f ^ { \mathrm { t o t } } \) is defined in Eq. (20). \( \rho \) is the density \( ( \rho = 5 1 7 4 \frac { \mathrm { k g } } { \mathrm { m } ^ { 3 } } ) \)) calculated by the mass of atoms in the unit cell divided by the cell volume. (a) Calculated from dynamical matrix. (b) Obtained from the simulated phonon dispersion curves. (c) Obtained from the experimental phonon dispersion curves [17–19].

verse optic (TO) branches for the high symmetry [100], [110], and [111] directions of wavevec-tor. In this case, the phonons are not accompanied by any wave of the electric field and the continuum theory equations, Eqs. (1) and (2) with \( E _ { i } = 0 \), yield the following dispersion equation for the frequency \( \omega \) of the transverse modes [6]:


The excess over the par value for the 291,833,279 ordinary shares issued was credited to the share premium account with aggregate amount of approximately RMB4,464,387,000.

(c) In February 2016, 33,010,341 ordinary shares of the Company were allotted and issued to an entity controlled by Tencent and a number of independent third parties at a price of US\$3.0294 per share for an aggregated consideration of approximately US\$100,000,000 (equivalent to approximately RMB652,445,000). These shares rank pari passu in all respects with the shares in issue.

The excess over the par value for the 33,010,341 ordinary shares issued was credited to the share premium account with aggregate amounts of approximately RMB652,423,000.

(d) In January 2017, 30,201,818 ordinary shares of the Company were allotted and issued to three existing shareholders of the Company at a price of US\$3.31 per share for an aggregated consideration of approximately US\$100,000,000 (equivalent to approximately RMB 687,765,000). These shares rank pari passu in all respects with the shares in issue. The excess over the par value for the 30,201,818 ordinary shares issued was credited to the share premium account with aggregate amount of approximately RMB687,744,000.

	Contribution
from holding
company	Currency
translation
differences	Put option
on non-
controlling
interests	Share-based
compensation
reserve	Statutory
surlpus
reserve fund	 Total

RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB’000

As at January 1, 2014 .....	1,613	—	—	—	—	1,613

Deemed contribution .......	18,314	—	—	—	—	18,314

Currency translation
differences ..................	 —	(595)	 —	 —	 —	(595)

Share-based compensation
expenses (Note 37) ......	3,319	 —	 —	3,259	 —	6,578

Profit appropriations to
statutory reserves
(Note a) ......................	—	 —	 —	 —	517	517

Others .............................	768	—	 —	 —	 —	768

Initial recognition of put
option liability ............	 —	 —	(65,396)	 —	 —	(65,396)

As at December 31, 2014	24,014	(595)	(65,396)	3,259	517	(38,201)

As at January 1, 2015 .....	24,014	(595)	(65,396)	3,259	517	(38,201)

Currency translation
differences ..................	 —	(9,571)	 —	 —	 —	(9,571)

Share-based compensation
expenses (Note 37) ......	1,081	 —	 —	130,705	 —	131,786

Profit appropriations to
statutory reserves
(Note a) ......................	—	—	—	—	8,863	8,863

Others .............................	1,686	—	—	—	—	1,686

As at December 31, 2015	26,781	(10,166)	(65,396)	133,964	9,380	94,563


No.	Project Names	City	Interest
Attributable to
the Group	Primary Intended
Use	Site Area
(sq.m.)	Actual/
Estimated
Completion
Date	Land
Bank(1)
(sq.m.)	Address

34.	Zhumadian Royal Lantai
Mansion Phase V	Zhumadian	70%	Residential/
Commercial/
Carpark/Ancillary/
Others	156,270	2023/8/1	388,318	The southeast side of
the intersection of
Lizhuang Road and
Chunliu Road, and the
northwest side of the
intersection of Zhangtai
Road and Jianshe
Avenue, Zhumadian
City, Henan Province

35.	Jingzhou Leading Lantai
House	Jingzhou	100%	Residential/
Commercial/
Carpark/Ancillary/
Others	54,070	2021/12/31	208,275	Northwest of the
intersection of Chutian
Road and Dongqiao
Road, Jingbei New
District, Jingzhou
District, Jingzhou City,
Hubei Province

36.	Jingzhou Leading
Fengming Lantai
Mansion	Jingzhou	100%	Residential/
Commercial/
Carpark/Ancillary/
Others	48,399	2022/8/31	188,088	No.66, Fengming Avenue,
Jingzhou District,
Jingzhou City, Hubei
Province

37.	Leshan Amazon	Leshan	100%	Residential/
Commercial/
Carpark/Ancillary	91,900	2014/10/16	2,571	No. 418 and No. 424,
North Section of
Longyou Road,
Shizhong District,
Leshan City, Sichuan
Province

38.	Leshan Haina Mansion	Leshan	51%	Residential/
Commercial/
Carpark/Ancillary/
Others	36,200	2016/1/5	6,904	No.1589 Muyuan Road,
Muchuan County,
Leshan City, Sichuan
Province

39.	Leshan Lantai House	Leshan	60%	Residential/
Commercial/
Carpark/Ancillary/
Others	88,108	2021/12/31	156,422	East of the intersection
of Sansu Road and
Ruixiang Road,
Qingjiang New District,
Shizhong District,
Leshan City, Sichuan
Province

40.	Leshan Tianyu	Leshan	100%	Residential/
Commercial/
Carpark/Ancillary	29,796	2020/3/1	14,033	Intersection of Hanlin
Road and Fenghuang
Road, Tongjiang
District, Leshan City,
Sichuan Province

No.	Project Names	City	Interest
Attributable to
the Group	Primary Intended
Use	Site Area
(sq.m.)	Actual/
Estimated
Completion
Date	Land
Bank(1)
(sq.m.)	Address

41.	Leshan Lanshan	Leshan	70%	Residential/
Commercial/
Carpark/Ancillary/
Others	89,630	2021/10/1	155,006	No. 881, Section 1,
Ruixiang Road, Leshan
City, Sichuan Province

42.	Leshan International
Mansion	Leshan	100%	Residential/
Commercial/
Carpark/Ancillary/
Others	127,204	2019/5/17	3,568	Taoyuan New Village,
Mouzi Town, Shizhong
District, Leshan City,
Sichuan Province

43.	Zunyi Lantai House	Zunyi	55%	Residential/
Commercial/
Carpark/Ancillary/
Others	39,759	2022/11/30	130,977	Intersection of Shanghai
Road and Ningbo
Road, Huichuan
District, Zunyi City,
Guizhou Province

44.	Meishan Triumph
International Mansion	Meishan	100%	Residential/
Commercial/
Carpark/Ancillary/
Others	256,303	2020/11/27	57,506	Southwest corner of the
intersection of Hubin
Road and Meizhou
Avenue, Meishan City,
Sichuan Province

45.	Meishan Triumph Square	Meishan	79%	Residential/
Commercial/
Carpark/Ancillary	73,976	2015/5/19	17,092	Northeast of the
intersection of Suyuan
Road and Dongpo
Avenue, Dongpo
District, Meishan City,
Sichuan Province

46.	Meishan Huayu Phase II	Meishan	60%	Residential/
Commercial/
Carpark/Ancillary/
Others	9,102	2020/6/3	5,568	Southeast corner of the
intersection of Suyuan
Road and Chongguang
Street, Meishan City,
Sichuan Province

47.	Meishan Triumph
International Mansion
Phase II	Meishan	57%	Residential/
Commercial/
Carpark/Ancillary/
Others	39,838	2019/7/30	8,744	Northeast of the
intersection of
Jiangxiang Road and
Qingyihang, Dongpo
District, Meishan City,
Sichuan Province

48.	Meishan Lantai House	Meishan	55%	Residential/
Commercial/
Carpark/Ancillary/
Others	109,814	2022/12/10	369,014	Northwest corner of the
intersection of Fucheng
Road and Shuangfeng
Street, Dongpo District,
Meishan City, Sichuan
Province


	Notes	2020	2019

HK$’000	HK$’000

ASSETS AND LIABILITIES

Non-current assets

Property, plant and equipment	13	110,439	4,229

Intangible asset	14	87	1,027

Deposit paid for acquisition for intangible asset	16	1,000	–

		111,526	5,256

Current assets

Inventories	15	7,360	7,383

Trade and other receivables	16	3,641	4,753

Tax refundable		869	899

Time deposits	17	11,007	16,000

Cash and bank balances		5,798	10,172

		28,675	39,207

Current liabilities

Trade and other payables	18	1,052	1,486

Bank borrowings	19	12,250	–

Lease liabilities	21	511	–

		13,813	1,486

Net current assets		14,862	37,721

Total assets less current liabilities		126,388	42,977

	Notes	2020	2019

HK$’000	HK$’000

Non-current liabilities

Provision for long service payment		608	476

Provision for reinstatement cost		854	1,269

Bank borrowings	19	42,750	–

Promissory notes	20	44,724	–

Lease liabilities	21	940	–

		89,876	1,745

Net assets		36,512	41,232

Equity

Share capital	22	41,879	41,879

Reserves		(5,367)	(647)

Total equity		36,512	41,232

Chan Kun Yuen	Chan Shu Yuen

Director	Director

The notes on pages 74 to 130 are an integral part of these consolidated financial statements.


On 15 March 2019, a subsidiary of the Group entered into an agreement to fully dispose of its equity interest, representing 50% equity interest, in Shanghai Kaitai, a joint venture of the Group, to the joint venture partner of Shanghai Kaitai at a consideration of RMB1,005 million. Shanghai Kaitai has completed the development of its real estate project and distributed the profit to its respective shareholders before the disposal. The consideration was determined in accordance with the appraised net assets value of Shanghai Kaitai as of 31 January 2019. The transaction is expected to be completed by the end of March 2019.

	As at 31 December

2018	2017

RMB’000	RMB’000

ASSETS

Non-current assets

Interests in a subsidiary	2,016,724	1,993,141

Financial assets at fair value through profit or loss	649,860	—

	2,666,584	1,993,141

Current assets

Prepayments and other receivables	208	1,296

Amounts due from subsidiaries	7,679,814	6,654,600

Amounts due from a related party	637,433	—

Cash and bank balances	30,610	49,585

Total current assets	8,348,065	6,705,481

Total assets	11,014,649	8,698,622

EQUITY

Equity attributable to owners of the Company

Share capital	14	13

Share premium	4,423,556	3,506,038

Other reserves	(1,363,382)	(169,894)

Total equity	3,060,188	3,336,157

# 36 Balance sheet of the Company (continued)

	As at 31 December

2018	2017

RMB’000	RMB’000

LIABILITIES

Non-current liabilities

Borrowings	5,286,770	197,013

Current liabilities

Borrowings	2,393,994	5,114,757

Other payables	257,259	50,695

Amounts due to related parties	16,438	—

Total current liabilities	2,667,691	5,165,452

Total liabilities	7,954,461	5,362,465

Total equity and liabilities	11,014,649	8,698,622

Other reserve of the Company included share-based compensation reserve and accumulated losses. During the year, the change in share-based compensation reserve represents mainly the value of employee services under the share option scheme amounting to RMB23,583,000 (2017: RMB53,868,000), the change in accumulated losses represents mainly the loss of the Company amounting to RMB1,184,691,000 (2017: RMB223,477,000).

The balance sheet of the Company was approved by the Board of Directors on 21 March 2019 and was signed on its behalf:


# DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS

As at 31 December 2019, the interests and short positions of the directors and the chief executive of the Company in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register kept by the Company pursuant to Section 352 of the SFO or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) were as follow:

# (1) Long positions in the ordinary share (each a “Share”) of HK\$0.10 each in the Company

董事及最高行政人員之權益及淡倉

於二零一九年十二月三十一日，本公司董事及最高行政人員於本公司或其任何相聯法團（定義見證券及期貨條例第XV部）之股份、相關股份或債券中擁有根據證券及期貨條例第352條本公司存置之登記冊所記錄，或已根據香港聯合交易所有限公司（「聯交所」）證劵上市規則（「上市規則」）附錄十所載上市發行人董事進行證券交易的標準守則另行知會本公司及聯交所之權益及淡倉如下：

(1) 於本公司每股面值0.10港元普通股（各為一股「股份」）之好倉

Name of Director
董事姓名	Number of Shares
股份數目	Capacity/Nature of interest
身份╱權益性質	Approximate
percentage of
shareholding
股權概約百分比

			(Note 1)
（附註1）

Yeung Yung
仰融	2,673,071,189
(Note 2)
（附註2）	Interest of controlled corporation
受控法團權益

68,140,000	Beneficial owner
實益擁有人

2,741,211,189
(Note 3)
（附註3）		13.47%

Huang Chunhua
黃春華	35,000,000	Beneficial owner
實益擁有人	0.17%

Wang Chuantao
王川濤	30,000,000	Beneficial owner
實益擁有人	0.15%

Liu Stephen Quan
劉泉	281,760,000
(Note 4)
（附註4）	Founder of trust
Interest of children under 18
信託創始人
未滿18歲子女之權益

10,000,000	Beneficial owner
實益擁有人

291,760,000		1.43%

Name of Director
董事姓名	Number of Shares
股份數目	Capacity/Nature of interest
身份╱權益性質	Approximate
percentage of
shareholding
股權概約百分比

			(Note 1)
（附註1）

Zhu Shengliang
朱勝良	22,043,883	Beneficial owner
實益擁有人	0.11%

Li Zhengshan
李正山	26,270,000	Beneficial owner
實益擁有人	0.13%

Ting Kwok Kit, Johnny
丁國傑	3,000,000	Beneficial owner
實益擁有人	0.015%

Chen Xiao
陳曉	25,000,000	Beneficial owner
實益擁有人	0.12%

Cheng Tat Wa
鄭達華	1,300,000	Beneficial owner
實益擁有人	0.006%

Chan Sin Hang
陳善衡	500,000	Beneficial owner
實益擁有人	0.002%

(1) The percentage of shareholding is calculated on the basis of 20,352,872,747 Shares in issue as at 31 December 2019 and did not take into account any Shares which may fall to be allotted and issued upon exercise of any subscription rights attaching to any share options granted by the Company.

(2) These Shares are held by Sun East LLC. Sun East LLC is a limited liability company incorporated in California, the US, which is owned as to (i) 35% by Dr Yeung Yung (shared commonly with his spouse under the laws of California, the US) and (ii) 65% by Mr Ma Manwai (alias Ma Manwai, Philip) and Mr Jimmy Wang (alias Wang Jian) as co-trustees for certain trusts established for the benefit of the children of Dr Yeung Yung on 30 December 2002. Dr Yeung Yung (as well as his spouse) was deemed to be interested in the Shares held by Sun East LLC by virtue of Part XV of the SFO.

(3) The spouse of Dr Yeung Yung is deemed to be interested in the Shares beneficially held by Dr Yeung Yung by virtue of Part XV of the SFO.

(4) These Shares were indirectly owned by certain trusts of which Mr Liu Stephen Quan were the founder. The children of Mr Liu were eligible beneficiaries of the trusts. Mr Liu was deemed to be interested in these Shares by virtue of Part XV of the SFO.

(1) 持股百分比按於二零一九年十二月三十一日已發行20,352,872,747股股份計算，並無計及可能因本公司已授出之任何購股權所附任何認購權獲行使而須配發及發行之任何股份。

(2) 該等股份由Sun East LLC持有。Sun East LLC乃於美國加州註冊成立之有限公司，由(i)仰融博士擁有35%權益（根據美國加州法例與其配偶共同持有）及(ii)馬文偉先生及王健先生作為若干信託之共同信託人擁有65%權益，而該等信託於二零零二年十二月三十日設立，以仰融博士之子女為受益人。根據證券及期貨條例第XV部，仰融博士（及其配偶）被視為於Sun East LLC所持股份中擁有權益。

(3) 根據證券及期貨條例第XV部，仰融博士之配偶被視為於仰融博士實益持有之股份中擁有權益。

(4) 該等股份由劉泉先生為創始人之若干信託間接擁有。劉先生之子女為有關信託之合資格受益人。根據證券及期貨條例第XV部，劉先生被視為於該等股份中擁有權益。


Product name
(reference drugs/targets)	Indications	Progress as at the Latest
Practicable Date

Smooth progress of domestic clinical projects

HLX10+ HLX07	head and neck
squamous cell
carcinoma (HNSCC)	In July 2020, the first patient dosing
was comlpeted in a hipase 2 clincal trial
in mainland China

HLX10+ HLX04	Solid tumor	In September 2020, the enrollment of
subjects was comlpeted in a hpase 1
clinical trial

HLX10+ HLX04	Hepatocellular
Carcinoma (HCC)	In January 2021, the enrollment of
subjects was comlpeted in a hpase 2
clinical trial

HLX10+HLX04	Metastatic colorectal
cancer (mCRC)	In March 2021, the first patient dosing
was comlpeted in a Phase 2/3 clinical
trial in mainland China

HLX55 (innovative anti-c-Met
 monoclonal antibody)	Solid tumor	In March 2020, the first patient dosing
was comlpeted in a hilpase 1 clinca trial
in Taiwan, China

HLX07 (modified innovative
 anti-EGFR monoclonal
 antibody)	Solid tumor	In March 2020, the relevant clinical
research report was comlpeted for the
h1ilpase  clinical tra

HLX11 (pertuzumab)	Breast cancer (BC)	In September 2020, the first patient
dosing was comlpeted in a hpase 1
clinical trial in mainland China

HLX14 (desumumab)	Osteoporosis (OP)	In November 2020, the first patient
dosinlg was competed in a hpase 1
clinical trial in mainland China

Product name
(reference drugs/targets)	Indications	Progress as at the Latest
Practicable Date

Efficient advancement on IND aliippcaton for pre-clinical development projects

HLX13 (iilipmumab)	Melanoma, Renal Cell
Carcinoma (RCC),
Metastatic Colorectal
Cancer (mCRC)	In January 2020, the investigational new
drug alipcatipon (IND) was accepted by
the NMPA
In April 2020, the investigational new
drug alippcation (IND) was approved by
the NMPA

HLX56 (anti-DR4 monoclonal
 antibody)	Solid tumor	In May 2020, the investigational new
drulg aippcation ( IND) was approved
by the Ministry of Health and Welfare
of Taiwan.

HLX70 (anti-S1 fully human
 monoclonal
 neutralizing antibody)	COVID-19	In October 2020, the investigational
new druiNDg alppcation (I) was
approved by the U.S. Food and Drug
Administration (FDA)

HLX71 (ACE2-Fc receptor
 fusion protein)	COVID-19	In November 2020, the investigational
new druiNg alppcation (ID) was
approved by the U.S. Food and Drug
Administration (FDA)

HLX15 (daratumumab)	Multillpe myeoma
(MM)	In November 2020, the investigational
new drulg aippcation (IND) was
accepted by the NMPA
In January 2021, the investigational new
drug alippcation (IND) was approved by
the NMPA

HLX26 (Recombinant anti-
 LAG-3 human
 monoclonal antibody
 injection)	Solid tumor, lymhpoma	In January 2021, the investigational new
drug alippcation (IND) was accepted by
the NMPA


Aspect	KPI	Content	Chapter Reference or Notes

	B5.4	Description of practices used to
promote environmentally preferable
p r o d u c t s a n d s e r v i c e s w h e n
selecting suppliers, and how they are
implemented and monitored.	6.2 Responsible Procurement

B6 Product
Responsibility	General Disclosure	Information on:
(a)     the policies; and
(b)   compliance with relevant laws
and regulations that have
a significant impact on the
issuer
r e l a t i n g t o h e a l t h a n d s a f e t y,
advertising, labelling and privacy
matters relating to products and
services provided and methods of
redress.	6.1 Quality Guarantee
6.1.2 Customer Service
6.1.3 Information Security and Privacy

B6.1	Percentage of total products sold or
shipped subject to recalls for safety
and health reasons.	Not applicable to the Grou’ps
business

B6.2	N u m b e r o f p r o d u c t s a n d
service-related complaints received
and how they are dealt with.	6.1.2 Customer Service

B6.3	Description of practices relating to
observing and protecting intellectual
property rights.	6.1.3 Information Security and Privacy

B6.4	Description of quality assurance
process and recall procedures.	6.1.1 Safe Power Supply
Recalling procedures are not
applicable to the Grou’ps business

B6.5	Description of consumer data
protection and privacy policies, how
they are implemented and monitored.	6.1 Quality Guarantee
6.1.2 Customer Service
6.1.3 Information Security and Privacy

# 10. Content Index of the Environmental, Social and Governance Reporting Guide

Aspect	KPI	Content	Chapter Reference or Notes

B7 Anti-corruption	General Disclosure	Information on:
(a)     the policies; and
(b)   compliance with relevant laws
and regulations that have
a significant impact on the
issuer
relating to bribery, extortion, fraud
and money laundering.	6.3 Anti-corruption

B7.1	Number of concluded legal cases
regarding corrupt practices brought
against the issuer or its employees
during the reporting period and the
outcomes of the cases.	6.3 Anti-corruption

B7.2	Description of preventive measures
and whistle-blowing procedures, how
they are implemented and monitored.	6.3 Anti-corruption

B7.3	Description of anti-corruption training
provided to directors and staff.	6.3 Anti-corruption

B8 Community
Investment	General Disclosure	Policies on community engagement
to understand the needs of the
communities where the issuer
operates and to ensure its activities
t a k e i n t o c o n s i d e r a t i o n t h e
communities' interests.	9. Giving Back to Society
9.1 Fighting Icy Weather and
Protecting Electricity Power
9.2 Power Protection for College
Entrance Examination
9.3 Caring for the Community

B8.1	Focus areas of contribution (e.g.
education, environmental concerns,
labour needs, health, culture, sport).	9. Giving Back to Society
9.1 Fighting Icy Weather and
Protecting Electricity Power
9.2 Power Protection for College
Entrance Examination
9.3 Caring for the Community

B8.2	Resources contributed (e.g. money or
time) to the focus area.	9. Giving Back to Society
9.1 Fighting Icy Weather and
Protecting Electricity Power
9.2 Power Protection for College
Entrance Examination
9.3 Caring for the Community


“Non-competition Undertaking”	 the non-competition undertaking dated 18 November
2016 igven by each of our Controlling Shareholders in
favour of our Company, details of which are set forth in
the section headed “Relationship with our Controlling
Shareholders” in this prospectus

“Placing”	 the conditional lhpacinfg bhy te Underwriters o te
Placing Shares for cash at the Placing Price lpus
brokerage of 1%, SFC transaction levy of 0.0027% and
Stock Exchange trading fee of 0.005%, details of which
are described in the section headed “Structure and
conditions of the lacing” in thips prospectus on and
subject to the terms and conditions stated herein and in
the Underwriting Agreement

“Placing Price”	 the l0pacini2Plig prce of HK$. hper acnSig are (excludng
brokerage, Stock Exchange trading fee and SFC
transaction levy)

“Placing Shares”	 the 250,000,000 new Shares being offered for
subscription by our Company at the Placing Price under
the Placing

“PRC Legal Advisers”	 Dentons Law Offices, the Com’panys legal advisers as to
the PRC law

“Reorganisation”	 the corporate reorganisation of our Group in preparation
for the Listing as described in the sections headed
“History, reorganisation and group structure” in this
prospectus

“RMB”	 Renminbi, the lawful currency of the PRC

“SFC”	 the Securities and Futures Commission of Hong Kong

“SFO”	 Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, sulppemented or
otherwise modified from time to time

“Share(s)”	 ordinary shares with a nominal value of HK$0.01 each in
the share caiptal of our Company, which are to be traded
in Hong Kong dollars and listed on GEM

“Shareholder(s)”	 holder(s) of the Shares

“Sino Emperor”	Sino Emperor Group Limited, a company incorporated in
the BVI with limited liability on 30 November 2015, the
equity interest of which is entirely and beneficially
owned by Mr. Nelson Lau

“Sole Lead Manager” or “Sole
Bookrunner”	Head & Shoulders Securities Limited, a licensed
corporation to conduct type 1 (dealing in securities) and
type 4 (advising on securities) regulated activities under
the SFO, being the sole lead manager and sole
bookrunner of the Placing

“Sole Sponsor” or “Prosperity
Caiptal”	ProsHlperitdy Caiiptal onLiigs mted, a licensed
corporation to conduct type 6 (advising on corporate
finance) regulated activity under the SFO, being the
sponsor of the Listing

“Stock Exchange”	The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited

“subsidiary(ies)”	a company which is for the time being and from time to
time a subsidiary (within the meaning of the Companies
Ordinance) of our Company

“substantial shareholder(s)”	 has the same meaning ascribed to it under the GEM
Listing Rules

“Takeovers Code”	the Codes on Takeovers and Mergers and Share Buy-
backs issued by the SFC, as amended, sulppemented or
otherwise modified from time to time

“Track Record Period”	the period comprising the two years ended 31 December
2015 and the six months ended 30 June 2016

“Underwriters”	the underwriters of the Placing set out in the section
headed “Underwriting – Underwriters” in this prospectus

“Underwriting Agreement”	 the conditional underwriting agreement dated 28
November 2016 entered into among our Company, the
executive Directors, the Controlling Shareholders, the
Sole Sponsor, the Sole Lead Manager and the
Underwriters relating to the Placing, particulars of which
are summarised in the section headed “Underwriting” in
this prospectus


# II NOTES TO THE HISTORICAL FINANCIAL INFORMATION

The Company is a limited liability company incorporated in the Cayman Islands on 8 April 2013. The registered address of the Company is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Company changed its name from “Kingyee Co., Limited” to “Medlive Technology Co., Ltd.” on 24 February 2021.

The Company is an investment holding company. During the Relevant Periods, the Company’s subsidiaries were principally engaged in the provision of precision marketing and corporate solutions, medical knowledge solutions, and intelligent patient management solutions.

As at the date of this report, the Company had direct and indirect interests in its subsidiaries, all of which are private limited liability companies, the particulars of which are set out below:

Name	Place and date of
incorporation/
reigstration and
lpace of operations	Nominal value of
issued ordinary/
reigstered share cailpta	Percentage of equity attributable to
the Company	Principal activities

Direct	 Indirect

Kingyee (HK) Co.,
Limited (note (a))...	Hong Kong
3 May 2013	US$495,000	100%	 —	 Investment holding

Kingyee (Beijing) Co.,
Ltd. (“Jinye
Tiancheng”)*
(金葉天成(北京)
科技有限公司)
(note (b)) .......	PeolRpe’s elpubic of
China (“PRC”)/
Mainland China
29 August 2013	RMB9,000,000	 —	100%	 Provision of precision
marketing and
corporate solutions,
medical knowledge
solutions, and
intelligent patient
management solutions

Beijing Yimaihutong
Technology Co., Ltd.
(“Yimaihuton”)*g (北
京醫脈互通科技有限
公司) (note (c)) ....	PRC/Mainland China
18 April 2013	RMB10,000,000	 —	100%	 Provision of precision
marketing and
corporate solutions,
medical knowledge
solutions, and
intelligent patient
management solutions

Name	Place and date of
incorporation/
reigstration and
lpace of operations	Nominal value of
issued ordinary/
reigstered share cailpta	Percentage of equity attributable to
the Company	Principal activities

Direct	 Indirect

Shijiazhuang Maili
Technology Co. ,Ltd*
.(石家莊邁粒科技有限
公司) (note (d)) ....	PRC/Mainland China
30 October 2019	RMB2,000,000	 —	100%	 Research and
development

Yinchuan Yimaitong
Internet Hosiptal Co.,
Ltd. (“Yimaitong”)*
(銀川醫脈通互聯網醫
院有限公司)
(note (d)) .......	PRC/Mainland China
29 August 2019	RMB10,000,000	 —	100%	 Provision of internet
hosilpta services

(a) No audited financial statements have been prepared for the entity since its date of incorporation as it is an investment holding company with no operation and is exempted from preparing audited financial statements.

(b) The entity is registered as a wholly-foreign-owned enterprise under PRC law. The statutory financial statements of Jinye Tiancheng for the year ended 31 December 2018 prepared under PRC Generally Accepted Accounting Principles (“PRC GAAP”) were audited by Beijing Hongtian Zhongdao Certified Public Accountants Co., Ltd. (北京鴻天眾道會計師事務所有限公司), certified public accountants registered in the PRC. The statutory financial statements for the year ended 31 December 2019 prepared under PRC GAAP were audited by Beijing Zhongtian Xinda Certified Public Accountants Co., Ltd. (北京中天信達會計師事務所有限公司), certified public accountants registered in the PRC.

(c) The entity is a limited liability enterprise established under PRC law. The statutory financial statements of Yimaihutong for the years ended 31 December 2018 and 2019 prepared under PRC GAAP were audited by Beijing Jingsheng Certified Public Accountants Co., Ltd. (北京京盛會計師事務所有限公司), certified public accountants registered in the PRC.

(d) These entities are limited liability enterprises established under PRC law. No audited financial statements have been prepared for these entities, as these entities were incorporated in 2019.

\* The English names of these entities registered in the PRC represent the best efforts made by the management of the Company to directly translate their Chinese names as they did not register any official English names.


RMB 42,359 in 2019 while per capita consumption expenditure of urban residents reached RMB 28,063 in 2019. Responding to the increased demand and purchasing power, the investment in the real estate market has increased. The table below sets out income and expenditure of urban residents of the PRC for the years indicated:

Sources: National Bureau of Statistics of China

# Historical Price Trend of Production Factor

Land cost generally accounts for a significant proportion of a property developer’s overall costs. According to the Ministry of Natural Resources of the PRC, the average residential land cost of the 105 monitored cities has rose from RMB 5,277 per sq.m. in 2014 to RMB 7,434 per sq.m. in 2019, representing a CAGR of 7.1%. The table below sets out the land cost in the PRC for the years indicated:

\* Sanya has been included in the national monitoring scope in 2018. A total of 106 cities are therefore monitored. Source: Ministry of Natural Resources of the PRC

The prices of steel and cement decreased in 2014-2015, due to oversupply. The prices of steel and cement generally increased from 2015 to 2019, mainly due to regulations that shut down some small-to-medium sized steel and cement companies for environmental purposes, resulting in the tightening of supply of steel and cement in the market. However, the prices of steel fluctuated as the regulation started to loosen. The table below sets out selected statistics of construction materials of China for the years indicated:

Source: China Iron and Steel Association and China Cement Association

Labor cost is also an important factor for property developers. According to the National Bureau of Statistics, the average wage of workers in the construction industry and the real estate

industry in 2019 was RMB 65,508 and RMB 80,157 per year, respectively. The average wage of workers in the construction and real estate industries generally increased from 2014 to 2019 and is expected to continue to increase in the near future. The table below sets out labor costs of China for the years indicated:

# Recent Development of the Residential Property Market in the PRC

The PRC government plays a key role in the real estate market and has promulgated various control measures to avoid over-heating the property sector in recent years. The PRC government has formulated a number of measures which include various monetary, fiscal, land, regulatory and financing policies aimed at stabilizing the real estate market. Such legislative measures include but not limited to implementing regulations and policies on down payments of housing loans, restrictive conditions for home buyers, prices of residential properties and land supply. The PRC government emphasized that China will step up its efforts to establish a long-term mechanism for a healthy development of the real estate market and will not use the real estate market as an avenue to provide short-term stimulus for the economy.

Under guidance from the central government, various local governments in the PRC also promulgated regulations and measures to stabilize the real estate markets.

# REAL ESTATE MARKET OF SELECTED CITIES IN THE PRC

# The Western Taiwan Strait Economic Region

Xiamen is located along the 21st Century Maritime Silk Road, which is the sea route part of the China’s “Belt and Road Initiative.” Xiamen’s economy grew steadily in recent years. The nominal GDP increased from RMB 334 billion in 2014 to RMB 600 billion in 2019, representing a CAGR of approximately 12.4%. The fixed asset investment witnessed a continuous increase from approximately RMB 156 billion in 2014 to RMB 286 billion in 2019, representing a CAGR of 12.8%. The table below sets out selected economic indicators of Xiamen the years indicated:

\* estimated by the published data from the Statistics Bulletin of Xiamen in 2018 and 2019, stating that fixed asset investment received a 10.1% and 9.0% year-to-year growth in 2018 and 2019

Source: Xiamen Municipal Bureau of Statistics


Name	Major work experience

WU Huifeng
(吳慧峰)	Mr. WU has served as our Vice President since November 2018 and our Secretary to the
Board since December 2014. Mr. WU served as head of the settlement center of China
Nanshan Development (Group) Co., Ltd., deputy manager of the finance department
of Shanghai Nanshan Real Estate Development Co., Ltd. (上海南山房地產開發有限公
司) (formerly known as Shanghai Chengnan Real EstateDevelopment Company (上海
誠南房地產開發公司)), general manager of the finance and audit department, general
manager of the human resources department, assistant to the general manager, and
deputy general manager of China Merchants Finance Holdings Co., Ltd. He also worked
for our Company as Director, Supervisor, co-general manager of the Board office and
assistant to president.

Mr. WU Huifeng obtained a bachelor’s degree in economics majoring in accounting
from the Shanghai University of Finance and Economics and a master’s degree in
economics majoring in finance from Peking University in June 1996 and January 2012,
respectively. Mr. WU was granted the qualification of accountant in May 1998 by the
Ministry of Finance of the PRC.

ZHAO Bin (趙斌)	Mr. ZHAO has served as our Vice President since November 2018. He has been working
as executive director of CMS Investment since January 2019. He acted as our Chief
Compliance Officer from January 2016 to December 2018, chief compliance officer
of CMS Asset Management from January 2018 to January 2021, chairman of the
supervisory committee of China Merchants Fund from September 2017 to April 2020,
director of CMS Asset Management from July 2015 to May 2019, and director of China
Merchants Futures from July 2008 to May 2019. He took the position of assistant to
manager and manager of our Haikou branch, head of Futian branch, assistant to the
general manager of our Brokerage Business Department, deputy manager (person-
in-charge) of our Shenzhen Longgang securities branch, manager of our Shenzhen
Nanshan Nanyou Road securities branch, general manager of our Private Customer
Service Department, general manager of our Channel Management Department,
general manager of our Department of Retail Brokerage and our employee
representative Supervisor.

Mr. ZHAO Bin obtained a bachelor’s degree in economics majoring in international
finance from Shenzhen University and a master’s degree in science majoring in project
management from the University of Greenwich in June 1992 and December 2010,
respectively.

Name	Major work experience

HU Yu (胡宇)	Mr. HU has been the chief compliance officer and chief risk officer since December
2018. From August to November 2018, he was the deputy head of capital operation
department of China Merchants Group. He served as the member of CPC Committee
and the secretary of Disciplinary Committee of Guangdong Bureau of the China
Securities Regulatory Commission from November 2016 to July 2018. He was a
teacher in Xishan Middle School (西山中學), teacher of the foreign language teaching
and research office of Jiangxi Medical College, deputy principal staff member of
Department of Policy and Regulations, the principal staff member of Department
of Intermediary Supervision, the deputy officer and director of Office of the Party
Committee as well as the director of No.1 Inspection Office of Shenzhen Bureau of the
CSRC and member of CPC Committee and the secretary of Disciplinary Committee of
Hainan Bureau of the China Securities Regulatory Commission.
Mr. HU Yu obtained a Bachelor of Arts degree from Jiangxi Normal University (江西師範
大學) and a Master’s degree in Finance from Graduate School of People’s Bank of China
in July 1989 and July 1996, respectively.

WU Guangyan
(吳光焰)	Mr. WU has served as our Vice President since February 2019, and chairman of the
board of directors of CMS International since December 2018. He served as general
manager of our Department of International Business from November 2018 to June
2020, assistant to the President from July 2018 to February 2019, and general manager
of CMS Asset Management from April 2015 to August 2019. Mr. WU also used to be
engineer of Radio Electronics Research Institute in Wuhan City, technology manager
of information technology center of the head office of China Merchants Bank, general
manager of Technology Department of the Shenzhen branch of China Guangfa Bank,
person-in-charge for the operation department for credit card business department of
the headquarter of Ping An Bank, deputy general manager (person-in-charge) of our
Operations and Administration Department, general manager of our Private Customer
Service Department and general manager of our Assets Management Department.
Mr. WU Guangyan obtained a bachelor’s degree in automatic control majoring in
testing technology and instrument (自動控制系檢測技術及儀器專業學士學位) and a
master’s degree majoring in pattern recognition and intelligent control (模式識別與
智能控制專業碩士學位) from Huazhong University of Science and Technology in June
1988 and June 1995, respectively.