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方大B:2020年半年度报告(英文版)2020-08-22  

						                       Interim Report 2020 of China Fangda Group Co., Ltd.




China Fangda Group Co., Ltd.

     2020 Interim Report




         August 2020




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                                                Interim Report 2020 of China Fangda Group Co., Ltd.




  Chapter I Important Statement, Table of Contents and Definitions


    The members of the Board and the Company guarantee that the interim

report is free from any false information, misleading statement or material

omission and are jointly and severally liable for the information’s truthfulness,

accuracy and integrity.

    Mr. Xiong Jianming, the Chairman of Board, Mr. Lin Kebin, the Chief

Financial Officer, and Mr. Wu Bohua, the manager of accounting department

declare: the Financial Report carried in this report is authentic and completed.

    All the Directors have attended the meeting of the board meeting at which

this report was examined.

    Forward-looking statements involved in this report including future plans

do not make any material promise to investors. Investors should pay attention to

investment risks.

    The Company has specified market, management and production and

operation risks in this report. Please review the 10. Risks Facing the Company

and Measures in Chapter 4 Operation Discussion and Analysis.

    The Company will distribute no cash dividends or bonus shares and has no

reserve capitalization plan.




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                                                                     Table of Contents



Chapter I Important Statement, Table of Contents and Definitions .........................................................................................................2
Chapter II About the Company and Financial Highlights ........................................................................................................................6
Chapter III Business Introduction ............................................................................................................................................................9
Chapter IV Operation Discussion and Analysis .....................................................................................................................................15
Chapter V Significant Events ................................................................................................................................................................30
Chapter VI Changes in Share Capital and Shareholders ........................................................................................................................39
Chapter VII Preferred Shares .................................................................................................................................................................45
Chapter VIII Information about the Company’s Convertible Bonds .....................................................................................................46
Chapter IX Particulars about the Directors, Supervisors, and Senior Management ...............................................................................47
Chapter X Information about the Company’s Securities .......................................................................................................................49
Chapter XI Financial Statements ...........................................................................................................................................................50
Chapter XII Documents for Reference ................................................................................................................................................195




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                                              Definitions


                                     Refers
                     Terms                                                   Description
                                       to

                                     Refers
Fangda Group, company, the Company            China Fangda Group Co., Ltd.
                                       to

                                     Refers
Articles of Association                       Articles of Association of China Fangda Group Co., Ltd.
                                       to

                                     Refers
Meeting of shareholders                       Meetings of shareholders of China Fangda Group Co., Ltd.
                                       to

                                     Refers
Board of Directors                            Board of Directors of China Fangda Group Co., Ltd.
                                       to

                                     Refers
Supervisory Committee                         Supervisory Committee of China Fangda Group Co., Ltd.
                                       to

                                     Refers
Banglin Technology                            Shenzhen Banglin Technologies Development Co., Ltd.
                                       to

                                     Refers Gong Qing Cheng Shi Li He Investment Management Partnership
Shilihe Co.
                                       to     Enterprise (limited partner)

                                     Refers
Shengjiu Investment Ltd.                      Shengjiu Investment Ltd.
                                       to

                                     Refers
Fangda Jianke                                 Shenzhen Fangda Jianke Group Co., Ltd.
                                       to

                                     Refers
Fangda Zhichuang                              Fangda Zhichuang Science and Technology Co., Ltd.
                                       to

                                     Refers
Fangda New Material                           Fangda New Materials (Jiangxi) Co., Ltd.
                                       to

                                     Refers
Fangda New Energy                             Shenzhen Fangda New Energy Co., Ltd.
                                       to

                                     Refers
Fangda Property                               Shenzhen Fangda Property Development Co., Ltd.
                                       to

                                     Refers
Chengdu Fangda                                Chengda Fangda Construction Technology Co., Ltd.
                                       to

                                     Refers
Dongguan New Material                         Dongguan Fangda New Material Co., Ltd.
                                       to

                                     Refers
Kechuangyuan Software                         Shenzhen Qianhai Kechuangyuan Software Co., Ltd.
                                       to



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                                 Refers
Fangda Property Management                Shenzhen Fangda Property Management Co., Ltd.
                                   to

                                 Refers
Jiangxi Property Development              Fangda (Jiangxi) Property Development Co., Ltd.
                                   to

                                 Refers
Hongjun Investment Company                Shenzhen Hongjun Investment Co., Ltd.
                                   to

                                 Refers
Fang Qingling                             Shanghai Fangda Qingling Technology Co., Ltd.
                                   to

                                 Refers
Fangda Cloud Rail                         Shenzhen Fangda Cloud Rail Technology Co., Ltd.
                                   to

                                 Refers
Fangda Australia Co., Ltd.                Fangda Australia Pty Ltd
                                   to

                                 Refers
Zhichuang Technology Hong Kong            Fangda Zhichuang Science and Technology (Hong Kong) Co., Ltd.
                                   to

                                 Refers
Shihui International                      Shihui International Holding Co., Ltd.
                                   to

                                 Refers
Fangda Southeast Asia                     Fangda Southeast Asia Co., Ltd.
                                   to

                                 Refers
Chengda Curtain Wall Company              Chengda Fangda Curtain Wall Technology Co., Ltd.
                                   to

                                 Refers
Fangda Jianzhi                            Shanghai Fangda Jianzhi Technology Co., Ltd.
                                   to

                                 Refers
Jianke Hong Kong                          Fangda Jianke Hong Kong Co., Ltd.
                                   to

                                 Refers
Shenyang Fangda                           Shenyang Fangda Semi-conductor Lighting Co., Ltd.
                                   to

                                 Refers
Shenzhen Woke                             Shenzhen Woke Semi-conductor Lighting Co., Ltd.
                                   to

                                 Refers
SZSE                                      Shenzhen Stock Exchange
                                   to




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             Chapter II About the Company and Financial Highlights

1. Company Profile

Stock ID                        Fangda Group, Fangda B                   Stock code                    000055, 200055

Modified stock ID (if any)      None

Stock Exchange                  Shenzhen Stock Exchange

Chinese name                    China Fangda Group Co., Ltd.

English name (if any)           Fangda Group

English name (if any)           CHINA FANGDA GROUP CO., LTD.

English abbreviation (if any)   CFGC

Legal representative            Xiong Jianming


2. Contacts and liaisons

                                                       Secretary of the Board                  Representative of Stock Affairs

PRINTED NAME                                 Xiao Yangjian                               Guo Linchen

                                             20F, Fangda Technology Building, Kejinan 20F, Fangda Technology Building, Kejinan
Address                                      12th Avenue, High-tech Zone, Hi-tech Park 12th Avenue, High-tech Zone, Hi-tech Park
                                             South Zone, Shenzhen, PR China.             South Zone, Shenzhen, PR China.

Telephone                                    86(755) 26788571 ext. 6622                  86(755) 26788571 ext. 6622

Fax                                          86(755)26788353                             86(755)26788353

Email                                        zqb@fangda.com                              zqb@fangda.com


3. Other Information

1. Liaison

Changes to the Company’s registration address, office address, post code, website or email during the report period
□ Applicable √ Inapplicable
Company’s registration address, office address, post code, website or email have not changed during the report period. See Annual
Report 2019 for details.


2. Information disclosure and inquiring

Changes to the information disclosure and inquiring place
□ Applicable √ Inapplicable
Please refer to the 2019 annual report for the newspapers and websites where the Company’s information is disclosed. The inquiry

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address of the interim report has remained unchanged during the report period.


4. Financial Highlight

Whether the Company needs to make retroactive adjustment or restatement of financial data of previous years
□ Yes √ No

                                                   This report period          Same period last year          Year-on-year change (%)

Turnover (yuan)                                          1,251,608,064.42              1,425,890,946.99                       -12.22%

Net profit attributable to shareholders of
                                                           146,839,884.57                128,581,755.01                        14.20%
the listed company (yuan)

Net profit attributable to the shareholders
of the listed company and after deducting                  146,292,847.94                113,377,064.06                        29.03%
of non-recurring gain/loss (RMB)

Net cash flow generated by business
                                                          -136,985,479.40               -372,725,003.11                        63.25%
operation (RMB)

Basic earnings per share (yuan/share)                                   0.13                           0.11                    18.18%

Diluted Earnings per share (yuan/share)                                 0.13                           0.11                    18.18%

Weighted average net income/asset ratio                             2.81%                            2.55%                      0.26%

                                                End of the report period          End of last year             Year-on-year change

Total asset (RMB)                                       11,481,781,127.67             11,369,964,580.11                         0.98%

Net profit attributable to the shareholders
                                                         5,176,776,062.41              5,182,795,079.67                        -0.12%
of the listed company (RMB)


In the current period, the net profit of the current period is increased by about RMB80,739,565.80 as a result of changes in the
accounting estimates of accounts receivable and the expected credit loss rate of contractual assets.


5. Differences in accounting data under domestic and foreign accounting standards

1. Differences in net profits and assets in financial statements disclosed according to the international and
Chinese account standards

□ Applicable √ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account
standards during the report period.


2. Differences in net profits and assets in financial statements disclosed according to the overseas and
Chinese account standards

□ Applicable √ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account
standards during the report period.


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6. Accidental gain/loss item and amount

√ Applicable □ Inapplicable
                                                                                                                                In RMB

                                Item                                          Amount                            Notes

Non-current asset disposal gain/loss (including the write-off part
                                                                                       -1,981.72
for which assets impairment provision is made)

Subsidies accounted into the current income account (except the
government subsidy closely related to the enterprise’s business                    3,564,328.35
and based on unified national standard quota)

Gain/loss from change of fair value of transactional financial
asset and liabilities, and investment gains from disposal of
transactional and derivative financial assets and liabilities and                   1,926,439.93
sellable financial assets, other than valid period value instruments
related to the Company’s common businesses

Gain/loss from commissioned loans                                                     397,420.84

Other non-business income and expenditures other than the above                    -5,000,026.69

Less: Influenced amount of income tax                                                 339,144.08

Total                                                                                 547,036.63                  --

Explanation statement should be made for accidental gain/loss items defined and accidental gain/loss items defined as regular
gain/loss items according to the Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
□ Applicable √ Inapplicable
No circumstance that should be defined as recurrent profit and loss according to Explanation Announcement of Information
Disclosure No. 1 - Non-recurring gain/loss occurs in the report period.




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                                   Chapter III Business Introduction

1. Major businesses of the Company during the report period

      Headquartered in Nanshan District, Shenzhen, the Company's main businesses include high-end curtain systems and materials,
rail transport screen doors, new energy, and real estate development. The Company adheres to the spirit of ―Fangda Quality‖ with
excellence and quality first, and with the core competitiveness of product quality, technical strength and brand influence to provide
high-quality products and services in the relevant industries. Currently, five major business subsidiaries of the Company are national
high-tech enterprises with modern production bases in Shanghai, Chengdu, Nanchang, and Dongguan. The Company was engaged in
the following businesses in the report period.
     1. High-end curtain wall system and material business:
     (1) Main products and purpose
     The Company’s main products include energy-saving curtain walls, photo-electricity curtain walls, LED color-display curtain
walls, PVDF aluminum plate, graphene aluminum plate, and Nano aluminum plate materials. Construction curtain walls are mainly
used on high-level buildings (such as information centers, data centers, technology industry headquarters, R&D centers, office
buildings, etc.), large-area public venues such as airports, stations, cultural centers and exhibition centers, daylighting roof, shaped
construction (ball-shaped and clock-shaped buildings) and buildings with peripheral protection, energy saving, environmental
protection and decoration functions.
     (2) Macroeconomic situation of the industry, the impact of changes in the industrial policy environment on the
Company, and the countermeasures taken by the Company
     The emerging new epidemic has an inevitable impact on China's economy in the medium and short term. However, China's
economy has strong toughness, great potential and wide scope of circulation. During the two sessions this year, the country put
forward the economic policy of "six stabilizes" and "six guarantees", which will bring more development opportunities to the
development of the curtain wall and material industry by cultivating the economic growth point of the new industry and increasing
the investment in the new infrastructure. In 2020, it is the 40th anniversary of the establishment of Shenzhen Special Economic Zone.
It is the year for the construction of Guangdong, Hong Kong, Macau and Shenzhen to spread out and push forward the construction
of socialism with Chinese characteristics in an all-round way. The "chemical effect" and "multiplier effect" will be released in a new
era of the "two zones" drive force. Shenzhen, as an important curtain wall market of the company, will also take full advantage of the
unique advantages of Guangdong, Hong Kong and Macao Great Bay, reform and opening-up demonstration area, in order to further
consolidate and increase market share.
     In the future, the company will focus on resources and advantages to further expand the competitive domestic market of "home
door" such as Guangdong, Hong Kong, Macao, Macau, Changjiang and Chengdu-Chongqing. At the same time, it will take account
of overseas market, set up long-term development mechanism of team, continuously promote brand image, focus on key customers,
enrich quality resources, establish strategic alliance with excellent enterprises, increase investment in software and hardware,
promote the construction of intelligent factory, it will bring advanced science technology, such as AR, 5G, AI, VR, big data and so on
into production and management, abandon manpower tactics, reduce production costs, reduce labor costs, improve product quality
and enterprise benefits, form a new business pattern with big and international cycle, promote each other, maintain sustainable
development.
     (3) Main business modes, specific risks and changes;
     The high-end curtain wall projects implemented by the Company are mainly through the bidding method to obtain contract
orders. Project design, material procurement, production and processing, and the construction and installation and after-sales service
model are based on the contract orders. The main risk of this mode is that it takes a long period of time from the completion of the


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order to the completion of the project, and it is highly dependent on raw materials and labor costs. It is greatly affected by the
national industrial policy, raw material prices, and labor market fluctuations. Different contract orders have different requirements,
imposing high requirements on technology and production management. The main business model of the Company's curtain wall
engineering is the entire industry chain, from design, process, material procurement, production and processing, to construction and
after-sales service. The curtain wall project of the company adopts the technology of standard design, factory production and
assemble construction, which has the advantages of good construction quality, high installation precision and green environment
protection. It solves the difficulties of traditional construction and reduces the manual dependence greatly.
      The operation mode remained unchanged in the report period.
      (4) Market competition pattern, cyclical characteristics of the Company's industry and the Company's market position
      Affected by the epidemic this year, with the increasing pressure of market competition, the industry has become more refined
and standardized. Small businesses with fragmented operations, unqualified and weak competitive ability have been eliminated by
the market, and market concentration has increased. The competition in the high-end market is dominated by the brand and strength
of the curtain wall enterprises, and requires the participating enterprises to have complete qualifications, large scale, advanced
technology, standardized management and deep talent reserve, and gradually form a certain competition threshold. At the same time,
the total number of employees in the curtain wall industry is declining, and the contradictions in human resources are more
prominent. It also puts forward more urgent needs for intelligent manufacturing and management tool applications. There is no
obvious periodicity in the curtain wall industry.
      The Company is a pioneer and first listed company in this industry and has presided over and participated in the compilation of
more than ten national or industry standards such as Design Standards for Energy Efficiency of Public Buildings. Over the past more
than 20 years, the Company has undertaken hundreds of large projects and received the highest award in the industry China
Construction Luban Award and Zhan Tianyou Civil Engineering Award for many times. The Company has also received nearly 100
provincial and above awards. The Company has been in the top 10 of ―China's top 100 building curtain wall industry‖ for many years,
and has already had strong brand advantages and competitiveness in the industry. The Company has a strong technology lead in the
industry with 495 patents, including 57 intention patents and 11 software copyrights. The Company also made 9 records among
Chinese enterprises. The Company has a Class A qualification for building curtain wall engineering contracting and class A
qualification for building curtain wall engineering design. It is the highest level for curtain wall design and construction companies in
China.
      (5) Industry qualification types and validity period
      During the reporting period, the company's relevant qualifications have not changed significantly, and the validity period has
not expired.
               No.          Qualification                                           Effectiveness
                1           Construction curtain wall designing class A             Until March 16, 2025
                2           Construction curtain wall contracting class A           Until February 3, 2021
                3           Construction decoration contracting class B             Until March 4, 2021
                4           Steel structure engineering contracting class B         Until March 4, 2021
                5           Construction mechanical and electric equipment          Until March 4, 2021
                            installation contracting class C
                6           City and road lighting engineering contracting class C Until March 4, 2021
      (6) Quality control system, implementation standards, control measures and overall evaluation
      Quality control system: The Company implements a comprehensive quality management system and has established a quality
management system in accordance with ISO9001 from the aspects of design, procurement, storage, production, testing, delivery,
installation, and after-sales service, and conduct regular reviews.
      Implementation of the standard: In the process of building curtain wall business, the Company strictly complies with
GB/T21086-2007 "Building Curtain Wall", JG/T231-2007 "Building Glass Lighting Roof" and other national and industrial

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standards.
     Control measures: The Company has established complete and effective quality control measures and quality management
bodies, and strictly implements various quality management and control measures.
     Overall evaluation: The Company's products and project quality are in full compliance with the relevant requirements of the
relevant national standards and standards, and maintain proper operation, providing customers with stable and reliable quality
products and engineering.
      (7) Major project quality problem during the reporting period
     None.

      2. Rail transport screen door business

     The Company's main products in this sector are rail transport screen door systems and technical maintenance services, which
are a necessary part of modern urban rail transport system. It is installed at the edge of the subway platform and separates trains from
the platform. The business model is to order-based production, obtain contract orders through bidding (divided into open bidding and
bid invitation), design, process, purchase raw materials, factory production, construction and installation, and technical maintenance
services according to the orders.

     The Company has built a complete industry chain that integrates R&D, designing, production, installation engineering and
after-sales services. The business model has not changed during the reporting period. The Company has established a quality
management system from design, procurement, production, installation and after-sales service in accordance with ISO9001, and has
passed ISO9001, ISO14000 and international railway IRIS system certification. The Company's rail transit shielding door system
adopts the original technology of the company and has the product with the independent intellectual property right. The company has
compiled the first industry standard of the rail transit station shielding door in our country and compiled the national standard of
evaluation method of energy consumption and emission index of urban rail transit (GB/T 37420-2019). At present, the Company has
285 patents on subway shield doors, including 93 invention patents and 11 PCT patents. The total number of patents accounts for the
largest share of the industry in China. At the same time, it has 7 computer software copyrights. Fangda Zhichuang Technology Co.,
Ltd. is engaged in the subway transportation shield door system industry as a state-level high-tech enterprise. The Fangda screen door
system with technical standards at the international advanced level has been used in rail transit in more than 40 cities around the
world. More than 10 million people use the Fangda screen door screen system every day, and the coverage rate in domestic metro
operating cities exceeds 80%. The market share ranks first in the world for many years.

      3. New energy industry: Solar PV power generation industry is largely supported by the Chinese government. The Company is
one of the first companies that possess intellectual property rights in the designing, production and integration of solar PV systems.
The grid-connected Jiangxi Pingxiang Xuanfeng Town Solar Photovoltaic Power Station, Nanchang Jiangxi Isuzu Automobile Co.,
Ltd. Parking Shade Photovoltaic Power Station and Dongguan Songshan Lake Photovoltaic Power Station all operated smoothly, and
the power generation efficiency was in line with the design. In 2020 H1, it achieved sales revenue growth of 28.90% over 2019 H1,
and an operating profit growth of 74.67% over 2019 H1. It will continue to bring long-term and stable income and profits to the
company in the future.

      4. Real estate
    The Company currently has one completed project: Fang Dacheng ("Fang Dacheng", the same below) project in Nanshan
District, Shenzhen; one project under development: the Nanchang Phoenix Island Fangda Center project; Two: Fangda Bangshen
Industrial Park project in Baoan District, Shenzhen, and urban renewal project in the area along the Dakang River in Henggang,
Shenzhen.
    For a detailed discussion of the Company’s business, please refer to “III. Analysis of Core Competencies” in this section
of the report and Chapter VI “Operation Discussion and Analysis”.




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II. Major assets change

1. Major assets change


                Main assets                                                    Major change


Equity assets                             None

Fixed assets                              None

Intangible assets                         None

                                          The construction in progress increased by 6.84% year-on-year, mainly due to the
Construction in process
                                          increased investment in the construction of the Shanghai East China Base project.

Investment real estate                    None


2. Major foreign assets

□ Applicable √ Inapplicable


3 Core Competitiveness Analysis

      (1) Curtain wall system and material
      1. Expertise and brand competitiveness
      As the world's leading high-end curtain wall system supplier and service provider, the company has rich industry experience,
professional technical team and excellent construction team. It is an outstanding domestic curtain wall enterprise and has built
thousands of high-quality projects at home and abroad, winning widespread praise from all walks of life. The industry and target
market of the Company have high requirements for the performance of participating enterprises which has formed certain thresholds.
Especially in the super high-rise buildings, large public buildings and special-shaped external maintenance structures, the company
has rich experience in project implementation. It has established business contacts and cooperation with many large real estate
development companies. The Company has a high reputation and strong market competitiveness.
      The Company has 495 patents (including 57 invention patents) and 11 software copyrights in the curtain wall system and
materials industry which has created many firsts in the industry and is one of the high-end preferred brands in the Chinese curtain
wall system materials industry. So far, four subsidiaries including Shenzhen Fangda Jianke Group Co., Ltd., Fangda New Material
(Jiangxi) Co., Ltd., Dongguan Fangda New Material Co., Ltd., Chengdu Fangda Construction Technology Co., Ltd. have been
recognized as hi-tech companies. FANGDA is a nationwide well-known trademark in China.
      2. Focusing on the high-end market to edge out competitors
      In the fierce market competition, the Company accurately positions the market in the field of high-end energy-saving curtain
wall systems with high requirements for technology, service and management, and focuses its resources on high-end curtain wall
projects. Many of the curtain wall projects undertaken won the national "Luban Award", "Zhan Tianyou Civil Engineering Award",
"National Quality Engineering Award", "China Construction Engineering Decoration Award", "White Magnolia" Award and
"Customer Satisfaction Project" awards, and Won the title of ―Top Ten Most Competitive in China's Curtain Wall Industry‖. The
Company has built a leading brand and created a clear edge in the high-end curtain wall market.
      3. Well-developed industry base landscape
      Thanks to continued investment in facilities, the Company has established a national business landscape with Shenzhen as the
headquarters, Dongguan Songshanhu as the base in the southern China and overseas, Chengdu in the southwest and Shanghai and

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Nanchang in the east. The Dongguan Songshanhu and Nanchang bases are the largest and most advanced curtain wall system and
material production bases in China and across the world, fueling the Company to increase its market share and competitiveness.
      4. General solutions
      The Company has integrated the design, production, management and engineering of curtain wall systems to enjoy
technological, cost, quality and service advantages.
      5. Talent
      The Company has trained a group of outstanding teams with strong marketing technical, management and financial experience
from a large number of project implementation experience. The core backbone personnel are stable, ensuring the execution ability of
orders and bringing good user experience to customers.
      6. Boost overseas market development to increase overseas orders
      In recent years, the Company has increased its expansion in overseas markets and gradually expanded its influence in Australia
and Southeast Asia. Thanks to good product quality and contract performance, it has continuously won the trust of new and old
customers and more orders. The overseas market orders are growing steadily.
      (2) Rail transport screen door business
      1. National development strategy
      In September 2019, the "Outline for the Construction of a Powerful Transportation Country" issued by the Central Committee
of the Communist Party of China and the State Council proposed that by 2035, a transportation powerhouse will be basically
completed, and a "national 123 travel transportation circle" will be basically formed (one hour commuting in urban areas, two hours
in urban areas, 3 hours coverage in major cities nationwide). According to statistics from the China Urban Rail Transit Association,
as of June 30, 2020 , a total of 41 cities in mainland China have opened 6917.62 kilometers of urban rail transit operating lines. In
2020 H1, the State Development and Reform Commission approved the addition of 272.54 km of urban rail transit routes, with an
additional investment of RMB230.615 billion. With the development of urbanization and population gathering in the central cities,
China's urban rail transit will continue to grow in recent years. As the world's largest supplier of rail screen door systems, the
Company will also take full advantage of technologies, brands, services, etc. to further consolidate and improve the domestic market
share, and vigorously expand overseas markets, especially the "Belt and Road" national market, to maintain overseas orders.
Continuity and stability will allow the domestic and foreign markets to develop in a balanced manner and continue to ―lead‖ in the
rail transit industry.
      2. Expertise competitiveness
      Through continued independent innovation, the Company has developed the global leading metro screen door system with full
intellectual property right and broken the monopoly of overseas competitors. The Company has also compiled the Rail Transport
Station Screen Door Standard, which is the first of its kind in China. The standard was implemented as a national standard on March
1, 2007. As the first standard in the industry in China, the standard has played a key role in guiding the development of China’s rail
transport screen door industry and enabled the Company a dominant lead in the industry. In 2019, following the editor-in-chief of the
Urban Rail Transit Platform Screen Door, the Company once again participated in the preparation of the Urban Rail Transit Energy
Consumption and Emission Index Evaluation Method (GB / T 37420-2019) and officially implemented it on December 1, 2019,
highlighting the Company's technical strength and long-term leader status in the field of urban rail transit. At present, the Company
has 285 patents on subway shield doors, including 93 invention patents and 7 PCT patents. The total number of patents accounts for
more than half of the industry in China. At the same time, it has 7 computer software copyrights. Fangda Zhichuang Technology Co.,
Ltd. is engaged in the subway transportation shield door system industry as a state-level high-tech enterprise.
      3. Brand competitiveness
      So far, the Company has undertaken railway screen door projects in more than 40 cities including Hong Kong, Singapore,
Kuala Lumpur of Malaysia, Noida of India and Bangkok of Thailand. The Fangda subway screen door system has grasped a leading
market share and established incomparable brand influence thanks to its patents, standard and maintenance services. The Company
has become a leading railway screen door supplier in the world. FANGDA is a nationwide well-known trademark in China. The



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Company has become a leading railway screen door supplier in the world.
      4. Industry chain advantage
      As the first company to enter the subway screen door industry in China, the Company's subway screen doors have reached to
more than 80% of the subway cities in China, and many domestic subway screen doors have entered the maintenance period. The
Company actively expands its industrial chain and takes the lead in the domestic market to provide metro maintenance services. The
Company has a natural advantage in this high-end service industry. Our screen door system are independently developed by us, thus
enabling us to provide prompt, overall, effective and standard maintenance services for our customers without other third parties. As
more and more subways are opened, the business volume will continue to increase.
      (3) New energy industry
      The new energy business mainly comprises solar power PV application, PV construction and LED industry.
      1. Technical advantage
      With more than ten years’ experience in developing solar energy PV power generating curtain wall technology, the Company is
the earliest company that masters the intelligent property right in the designing, production and integration of solar energy PV curtain
wall systems and is a pioneer in the application of PV curtain wall technology.
       2. Relation with other industries
      Distributed solar power PV power generation is closely related to the Company’s existing businesses. Most distributed solar
power PV systems are closely related to construction. Moreover, the Company has more than 10 years' experience in electrical
product integration. The Company also has more than 20 years’ experience in construction management and has the level-1
construction curtain wall engineering qualification and electrical installation engineering qualification.
      (4) Real Estate
      1. The Company is committed to the Guangdong-Hong KongMacao Bay District, focusing on the development of urban
renewal projects in the core area of Shenzhen. Benefiting from the continued positive economic growth of Shenzhen and the rapid
economic development, it is expected that the Company's real estate sales and property leasing will contribute profits to the company.
      2. Although the company is a later comer in the industry, the Shenzhen Fangda Town project was quickly recognized by the
market and the sales rate was faster. At the same time, the Company has been rated as ―Shenzhen Real Estate Development Industry
Development Potential Enterprise‖ by Shenzhen Housing Association for three consecutive years. In two consecutive years, it has
been awarded ―Shenzhen Real Estate Development Industry Brand Value Enterprise‖ with professional operations for commercial
and property management.




                                                                                                                                     14
                                                                                Interim Report 2020 of China Fangda Group Co., Ltd.




                       Chapter IV Operation Discussion and Analysis

1. Summary

      In 2020 H1, the COVID-19 epidemic has been rampant in the world. The epidemic abroad has not seen any turning point,
social and economic industries have been greatly impacted, domestic and international economic negative growth, demand decline,
which has brought great challenges to the company operation. Under the adverse circumstance, the Company always insists on
grasping epidemic prevention and control, grasping rework and production, marketing, sales, collection, cost control and other
production and operation work. Under the leadership of the board of directors, through the efforts of all the staff, the Company
basically completed the business target of 2020 H1. The order reserve, net profit and other important business indexes not only did
not decline, but also achieved a certain increase, which is very difficult.
      During the reporting period, the net profit attributed to the owner of the parent company was 14,8#*@$ million yuan, up 14.20%
from the same period of the previous year, and the net profit attributed to the owner of the parent company after deducting the
non-recurrent profit and loss was 14,#*@$9 million yuan, up 29.03% from the same period of the previous year. The company
realized 125,5#*@$ million yuan of operating income, which was affected by epidemic, which was 12.22% lower than the same
period in the previous year, but recovered strong in the second quarter. The company realized 83,#*@$4 million yuan of operating
income in the second quarter, up 10.90% year-on-year. As of the end of the reporting period, the company's order reserve was
RMB4,808,923,100 (excluding real estate sales), an increase of 5.99% compared with the beginning of the year, which was 3.84
times of the operating income in the first half of the year. Adequate order reserve provided a strong guarantee for the company's
sustainable development.
      At present and in the future, epidemic and economic situation are more uncertain. China is speeding up to form a new
development pattern with domestic consumption cycle as the main body and domestic and international double cycle promoting each
other. The Company will make full use of the top brand advantages at home, rely more on scientific and technological innovation,
empower advanced science and technology into production and operation, continuously improve product quality and enterprise
benefit, and maintain sustainable development of the company.
      1. High-end curtain wall system and material business
      In 2020, it is the 40th anniversary of the establishment of Shenzhen Special Economic Zone. It is the year for the construction
of Guangdong, Hong Kong, Macau and the Dabie District of Shenzhen to open and push forward the construction of socialism with
Chinese characteristics in an all-round way. In the new era of "double zone" good superposition and "double zone" driving force, the
company firmly grasps the opportunity, makes full use of the advantages of Shenzhen in the core region of Guangdong, Hong Kong
and Macao, adheres to the management concept of "technology-based, innovation-based", adheres to the spirit of "square craftsmen"
with the best quality, technical strength and brand influence. During the reporting period, the Company successively won the bid or
signed contracts with Shenzhen CIMC Satellite Internet of Things Industrial Building, Shenzhen Chuangzhi Cloud City Phase III,
Shenzhen Ruifeng Optoelectronic Building Project, Shenzhen Shenye Hetangling Garden, Guangzhou Vanke Expo Land No. 15,
Dongguan Chang’an OPPO R&D Center Project, Tianhe Mingmen Hao Ting in Shantou City, Shanghai Qibao Vanke Ecological
Business District Commercial Office Project, Hangzhou Fantasia 360 Project, Nanjing Science and Technology Development Island
Southern Primary School, Eco-Tech Island Northern Junior High School Project , Nanchang Xinli Times Square 2# Building,
Kunming Jinmao Yiting Business Center, Chengdu Merchants Damofang 12# Building, Ningxia Baofeng Hospital and Nursing
Home Project, Geelong GMHBA Project in Australia, Rosella Project in Melbourne, Australia, Wills St Project in Melbourne,
Australia, Thailand A large number of high-end curtain wall system and material projects such as the SAM project and the Saudi
Metro FLASH bid section. The total amount of the winning bids and the newly signed orders was RMB1.499 billion, an increase of
27.25% over the same period last year. Among them, the Guangdong-Hong Kong-Macao Greater Bay Area project amounted to


                                                                                                                                    15
                                                                                  Interim Report 2020 of China Fangda Group Co., Ltd.


RMB873 million, accounting for 58.24% of the aggregate. 2. In the reporting period, the curtain wall system and materials industry
realized operating income of RMB841,699,200, an increase of 16.29% over the same period of the previous year; the net profit was
RMB91,247,700, an increase of 88.56%; with a gross margin of 16.67%, up 0.89 percentages over the same period of last year; As of
the end of the reporting period, the Company's curtain wall system and materials business orders reserve was RMB316,8661,400,
which was 376% of the sales revenue of the curtain wall system and materials business in 2019 H1.
        In order to meet the increasing demand for orders, the Company started construction in 2019 and built a new production base in
East China in Shanghai Songjiang. It is planned to be put into use in the second half of the year. The base occupies 2.38 000 square
meters and has a total construction area of about 43,000 square meters. After completion, the Company's curtain wall system and
materials industry are formed with Shenzhen as the headquarters South China with Dongguan Songshan Lake and Foshan as the base
Southwest China with Chengdu as the base East China with Shanghai and Central China with Nanchang.                  As the base of the
national industrial layout, it provides an important guarantee for improving market share and comprehensive competitiveness.
        During the reporting period, the company strengthened management innovation, through intelligent factory construction,
technology innovation, marketing system reform, project refined management and other reform and innovation measures, began to
put advanced science and technology into the enterprise work, abandon the human sea tactics, change production mode, optimize
production process, improve production efficiency, accelerate the company from "manufacturing" to "intellectual manufacturing". It
is expected that the first smart factory will be built at Dongguan Songshan Lake Base at the end of this year to the first half of next
year.
        2. Rail transport screen door business
        Facing the severe test and complicated and changeable domestic and international environment brought by the new crown
epidemic, the company successively won the contract with the market occupation rate, brand influence, patent possession quantity,
standard formulation and maintenance professional service and other leading advantages such as Xi'an metro line 5 phase 2, Nanning
city rail transit line 5 phase 1 project (Guo Kai Avenue-Jin Qiao passenger station), Fuzhou rail transit line 5 and other shielding door
system project orders, Shenzhen metro lines 1, 2, 5, 11, Nanchang rail transit line 2, etc. By the end of the report period, undelivered
orders for screen doors are worth RMB1,640,261,600. 3. In the first quarter of 2020, the rail transit equipment industry realized
operating income of RMB333,462,700, an increase of 68.47% over the same period of the previous year; the order reserve quantity is
4.92 times the operating income in the first half of the year; the net profit was RMB58,581,900, an increase of 64.42% over the same
period of the previous year. The gross margin is 26.99%.
        With the development of China ’s urban rail transit from scratch, from a single line to a network, and the end of the free
maintenance period for more and more rail transit screen doors, the demand for specialized technical maintenance services continues
to grow. In the reporting period, the company achieved technical maintenance service income of RMB15,274,000, an increase of
28.70% over the same period last year. The Company is a leading company that can provide the entire industry chain technology and
product services for subway screen doors. The added value of technical services is high. In the future, this business will become an
important performance growth point for the company. The Company will also strive to become a metro screen door technology
maintenance service expert.
        During the reporting period, Hangzhou Metro Line 16 and Shenyang Metro Line 10, equipped with Fangda screen door system,
were put into operation successively. At present, Fangda Shielding Door System has been applied in 42 cities of the world. More than
10 million people use Fangda Shielding Door System every day, maintaining the world's leading market share, and the city coverage
rate of metro operation has reached over 80% in China. With the advanced original technology, independent brand and high quality
service, Fangda Shielding Door System has promoted the rapid development of China's metro shielding door industry and established
the global leading position of China's rail transit shielding door equipment industry.
        As the largest supplier of rail transit equipment products in the world, the company has won widespread praise for its
high-quality and efficient professional maintenance services. During the reporting period, the company won the title of 2020 (13th)
Rail Transit and City International Summit "Quality Supplier of Shielded Gate in 2019", Xiamen Rail Transit Group Co., Ltd.
"Advanced Subcontracting Maintenance Unit", Tianjin Rail Transit Group Co., Ltd. "Excellent Cooperative Subcontracting Unit",



                                                                                                                                      16
                                                                                    Interim Report 2020 of China Fangda Group Co., Ltd.


Huhhot Metro Line 1 Construction Management Co., Ltd. "Excellent Supplier", Wuhan Wuhan Railway Traffic Media Co., Ltd.
"Excellent Subcontracting Maintenance Project". The recognition of the industry partners affirms the company's advanced
technology and product quality in the field of urban rail transit shielding door equipment, and reflects Fangda's brand influence and
maintenance professional service in China's rail transit shielding door industry.
       3. New energy industry
       During the reporting period, the company's three solar photovoltaic power stations that have been connected to the grid have
maintained efficient, stable and safe operation. The annual sales revenue achieved an increase of 28.90% over 2019 H1, and the
operating profit achieved an increase of 74.67% over 2019 H1, exceeding expectations.
       4. Real estate
       (1) Property project development progress:
       (1) Shenzhen Dacheng Project: The remaining small area of the project is to be sold. In the first half of the year, the tail sales
business is affected by epidemic. The Fangda Town project realizes the subscription sales area of 1,434.57 square meters and the
remaining area to be sold is 6172.26 square meters. The renting rate of commercial part is 99.46%, the new renting area of office
building is 11,506.56 square meters, the renting rate is 48.50%.
       (2) Nanchang Fangda Center: The project is located in the Fenghuangzhou District of the New District of Honggutan,
Nanchang City. It covers a total area of 16,600 square metres and has a total building area of 66,432.61 square metres. It is a small
and medium-sized commercial complex integrated with office, apartment, shopping, leisure and entertainment. The project is mainly
sold and leased, with a sales area of 32,460.11 square metres. It was pre-sold on 28 December 2019. The pre-sale area was 1,644.14
square metres during the reporting period.
       3. Shenzhen Fangda Bangshen Industrial Park: The project is located in Fuyong, Bao'an District, Shenzhen. It covers an area of
20,714.9 square meters and is currently an industrial plant. The project was approved in July 2019. During the reporting period, the
company is actively promoting the special plan of Fangda BongShen project.
       (4) Urban renewal project along the Dagang River in Henggang, Shenzhen: The project is located in Dakang Village, Yuanshan
Street, Longgang District, Shenzhen. The area of the project to be demolished is about 72,000 square meters. The update direction is
mainly residential function, and finally subject to government approval. The Company is currently pushing forward the approval
progress of the urban renovation project.
       It is expected that the real estate sales and property leasing will continue to contribute profits to the Company in the future. In
order to achieve its business objectives, the company will adhere to its strategic commitment, maintain a reasonable pace of
development, continue to increase sales efforts, strengthen sales receivables, rationally arrange financing, ensure the company is safe
and sound, and strive to achieve the company's 2020 goals.
       (2) New land reserve projects
                                                                                                               Total land       Equity
   Parcel or                                      Land area    Building area    Obtaining       Interests      price (ten   consideration
                Land location      Purpose             2              2
project name                                        (m )           (m )          method        percentage      thousand     (ten thousand
                                                                                                                 yuan)           yuan)

None

       (3) Total land reserve
                                                                                                             Remaining building area
       Project/region name                Floor area (10,000 m2)       Total building area (10,000 m2)
                                                                                                                   (10,000 m2)

Fangda Town                        3.53                               21.24                              0

Nanchang Fangda Center             1.66                               6.64                               0

               Total               5.19                               27.88                              0

       (4) Main production development status

                                                                                                                                         17
                                                                                                 Interim Report 2020 of China Fangda Group Co., Ltd.


                                                                                                                                            Total                     Accumu
                                                                                                                            Area                           Estimat
                                                                                                          Plannin                           area                        lated
                                                                                                                        complet                            ed total
                                             Interests               Develop                    Land            g                        complet                            total
City/reg                Land       Project                Starting              Complet                                     ed in                         investm
            Project                          percenta                 ment                      area      construc                          ed in                      investm
     ion               location     form                   time                 ion rate                                    this                           ent (in
                                                ge                   progress                   (m2)     tion area                           this                       ent (in
                                                                                                                 2
                                                                                                                            phase                         RMB10,
                                                                                                              (m )                          phase                     RMB10,
                                                                                                                            (m2)                 2
                                                                                                                                                            000)
                                                                                                                                            (m )                            000)

                       No.1516
Honggu
                       Ganjian
tan New
            Fangda g North Comme               100.00 1 May                                 16,608. 66,432.
District,                                                            62.00%      62.00%                                 0               0                   67,000      41,336
            Center     Avenue rcial                  % 2018                                 55           61
Nancha
                       Fangda
ng
                       Center

       (5) Main production sales status
                                                                                                                     Amount
                                                                                                                        of                                            Settleme
                                                                                                       Pre-sale                                          Settleme
                                                                                     Cumulati                        pre-sale Cumulati                                      nt
                                                                                                       (sales)                                           nt area in
                                                Interests                                  ve                        (sales) in             ve                         amount
City/regi                 Land       Project                 Building Sellable                         area in                                              the
             Project                            percenta                             pre-sale                           the         settleme                           in this
     on                 location      form                   area (m2) area (m2)                         this                                             current
                                                     ge                                  (sales)                      current           nt area                        period
                                                                                                 2
                                                                                                       period                                2
                                                                                                                                                          period
                                                                                     area (m )                        period             (m )                         (RMB10
                                                                                                        (m2)                                               (m2)
                                                                                                                     (RMB10                                             ,000)
                                                                                                                       ,000)

                                    R&D
Shenzhe
                        No.2        office
n           Fangda                                                      93,086.2 85,479.4                                           85,479.4
                        Longzhu commerc 100.00% 212,400
Nanshan Town                                                            5            2                                              2
                        4th Road ial
District
                                    complex

                        No.1516
Honggut
                        Ganjiang
an New
            Fangda      North       Commer                   65,388.4 32,460.1
District,                                       100.00%                              1644.14 1644.14                 2,301.87 1644.14
            Center      Avenue      cial                     2          1
Nanchan
                        Fangda
g
                        Center

       (6) Main production lease status
                                                                         Interests              Leasable area                 Cumulative                    Average lease
       Project           Land location         Project form                                               2                                          2
                                                                        percentage                     (m )              leased area (m )                           ratio

                                             R&D office
Shenzhen Fangda Shenzhen
                                             commercial                         100.00% 72,517.71                       35,168.44                                       48.50%
Town                   Nanshan District
                                             complex

Shenzhen Fangda Shenzhen
                                             Commercial                         100.00% 22,775.52                       22,652.59                                       99.46%
Town                   Nanshan District


                                                                                                                                                                                    18
                                                                                          Interim Report 2020 of China Fangda Group Co., Ltd.


Jiangxi Nanchang
                     Nanchang,           Plant and office
Science and                                                                100.00% 9,832.20              9,832.20                        100.00%
                     Jiangxi Province building
Technology Park

                     Shenzhen            R&D office
Fangda Building                                                            100.00% 17,792.47             12,858.46                        72.27%
                     Nanshan District building

      (7) First-level development of land
□ Applicable √ Inapplicable
      (8) Financing source

                          Ending financing           Financing cost                                   Term structure
   Financing source             balance (in         range / average
                                                                             Within 1 year        1-2 years         2-3 years       Over 3 years
                            RMB10,000)               financing cost

                                                  Based on LPR
                                                  interest rate, the
Bank loan                               118,000                                    6,375.00          8,750.00            8,750.00      94,125.00
                                                  upper limit is
                                                  6.175%

         Total                          118,000                                    6,375.00          8,750.00            8,750.00      94,125.00

      (9) Bank mortgage loan guarantee provided for commercial housing purchasers
√ Applicable □ Inapplicable
      As of June 30, 2020, the balance of the Company's guarantee for commercial housing offenders due to bank mortgage loans
was RMB492,341,700.
(10) Co-investment by directors, senior management and supervisors and listed company
□ Applicable √ Inapplicable


2. Main business analysis

For details see Management Discussion and Analysis – 1. Profile
Year-on-year changes in major financial data
                                                                                                                                          In RMB

                                  This report period         Same period last year            YOY change (%)                    Reason

Turnover                              1,251,608,064.42                 1,425,890,946.99                       -12.22%

Operation cost                          970,370,412.06                 1,066,065,970.56                        -8.98%

Sales expense                            20,978,235.09                   27,175,638.50                        -22.80%

Administrative expense                   62,559,463.16                   82,678,777.56                        -24.33%

Financial expenses                       44,884,568.71                   49,481,340.36                         -9.29%

Income tax expenses                      22,242,934.91                   24,019,259.71                         -7.40%

                                                                                                                        Mainly due to increased
R&D investment                           51,599,310.87                   14,702,673.12                    250.95% investment in research
                                                                                                                        and development

Cash flow generated by                 -136,985,479.40                  -372,725,003.11                       63.25% It is mainly due to the


                                                                                                                                                  19
                                                                                      Interim Report 2020 of China Fangda Group Co., Ltd.


business operations, net                                                                                          increase in cash flow of
                                                                                                                  operating activities due
                                                                                                                  to the gradual recovery
                                                                                                                  of mortgage bonds in the
                                                                                                                  current period and the
                                                                                                                  decrease in tax and
                                                                                                                  expense.

                                                                                                                  The net investment
                                                                                                                  expenditure in the current
                                                                                                                  period is mainly caused
Cash flow generated by
                                         -67,239,474.99            -579,720,478.07                     88.40% by the investment of the
investment activities, net
                                                                                                                  company's production
                                                                                                                  base, fixed assets and
                                                                                                                  investment real estate.

                                                                                                                  Mainly due to the
                                                                                                                  increase in bank loans
Net cash flow generated                                                                                           and the payment of cash
                                         89,832,186.57             376,629,126.62                     -76.15%
by financing activities                                                                                           dividends, and
                                                                                                                  repurchase of B-shares in
                                                                                                                  the current period.

Net increase in cash and
                                     -113,108,512.86               -576,045,363.83                     80.36%
cash equivalents

                                                                                                                  Mainly due to the
                                                                                                                  decrease in real estate
Taxes and surcharges                      7,526,514.98              41,481,000.07                     -81.86% income which is due to
                                                                                                                  the decrease in provision
                                                                                                                  of the land VAT.

                                                                                                                  Mainly due to changes in
                                                                                                                  accounting estimates for
Credit impairment ("-"                                                                                            accounts receivable and
                                         74,854,185.26                -4,369,660.38                 1,813.04%
for loss)                                                                                                         expected credit loss rate
                                                                                                                  of contract assets in the
                                                                                                                  current period

Major changes in profit composition or sources during the report period
□ Applicable √ Inapplicable
The profit composition or sources of the Company have remained largely unchanged during the report period.
Turnover composition
                                                                                                                                        In RMB

                                    This report period                           Same period last year

                                                   Proportion in                                  Proportion in         YOY change (%)
                                Amount                                       Amount
                                                operating costs (%)                            operating costs (%)



                                                                                                                                              20
                                                                                   Interim Report 2020 of China Fangda Group Co., Ltd.


Total turnover             1,251,608,064.42                    100%       1,425,890,946.99                    100%              -12.22%

Industry

Metal production                841,699,185.33               67.25%       1,005,451,498.68                  70.51%              -16.29%

Railroad industry               333,462,675.90               26.64%         197,936,254.53                  13.88%              68.47%

New energy industry               9,727,737.59                0.78%            7,546,757.83                  0.53%              28.90%

Real estate                      58,349,363.38                4.66%         204,754,339.12                  14.36%              -71.50%

Others                            8,369,102.22                0.67%          10,202,096.83                   0.72%              -17.97%

Product

Curtain wall system
                                841,699,185.33               67.25%       1,005,451,498.68                  70.51%              -16.29%
and materials

Subway screen door
                                333,462,675.90               26.64%         197,936,254.53                  13.88%              68.47%
and service

PV power generation
                                  9,727,737.59                0.78%            7,546,757.83                  0.53%              28.90%
products

Real estate sales                58,349,363.38                4.66%         204,754,339.12                  14.36%              -71.50%

Others                            8,369,102.22                0.67%          10,202,096.83                   0.72%              -17.97%

District

In China                   1,194,913,950.21                  95.47%       1,376,533,552.06                  96.54%              -13.19%

Out of China                     56,694,114.21                4.53%          49,357,394.93                   3.46%              14.86%

(2) Industries, products or districts that take more than 10% of the Company’s business turnover or profit
√ Applicable □ Inapplicable
                                                                                                                                 In RMB

                                                                                   Year-on-year        Year-on-year      Year-on-year
                         Turnover         Operation cost      Gross margin          change in           change in       change in gross
                                                                                operating revenue operating costs           margin

Industry

Metal production       841,699,185.33      701,375,574.65              16.67%             -16.29%             -18.37%             2.12%

Railroad industry      333,462,675.90      243,449,579.62              26.99%              68.47%              70.82%            -1.01%

Real estate             58,349,363.38       21,785,200.61              62.66%             -71.50%             -62.11%            -9.26%

Product

Metal production       841,699,185.33      701,375,574.65              16.67%             -16.29%             -18.37%             2.12%

Railroad industry      333,462,675.90      243,449,579.62              26.99%              68.47%              70.82%            -1.01%

Real estate sales       58,349,363.38       21,785,200.61              62.66%             -71.50%             -62.11%            -9.26%

District

In China             1,194,913,950.21      932,671,017.14              21.95%             -13.19%              -9.51%            -3.17%

Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period


                                                                                                                                          21
                                                                                         Interim Report 2020 of China Fangda Group Co., Ltd.


□ Applicable √ Inapplicable
Explanation for a year-on-year change of over 30%
√ Applicable □ Inapplicable
The operating revenue of the railway transportation industry in the current period rose year-on-year 68.47%. The operating revenue
of real estate industry fell year-on-year 71.5% as the sales of major enterprises have come to an end, resulting in the decrease of real
estate sales revenue in the current period.


3. Non-core business analysis

√ Applicable □ Inapplicable
                                                                                                                                         In RMB

                                Amount                Profit percentage                   Reason                    Whether continuous

Investment income                     -713,663.54                 -0.42%                                      No

Gain/loss caused by
changes in fair                          9,107.28                 0.01%                                       No
value

                                                                            Provision for impairment of
Credit impairment
                                  74,854,185.26                  44.28% write-off receivables and             Yes
loss
                                                                            contract assets

Non-operating
                                      275,841.64                  0.16%                                       No
revenue

                                                                            Donation of COVID-19
Non-business
                                   5,275,868.33                   3.12% epidemic and precision                No
expenses
                                                                            poverty alleviation


IV. Assets and Liabilities

1. Major changes in assets composition

                                                                                                                                         In RMB

                       End of the report period           Same period last year
                                                                                            Change
                                      Proportion in                     Proportion in                                   Notes
                        Amount                           Amount                              (% )
                                       total assets                       total assets

                    1,056,919,254.                    1,072,726,726.
Monetary capital                              9.21%                             9.80%        -0.59%
                                 36                                45

                                                                                                      This is due to the classification of
                                                                                                      payments that have not yet reached the
Account               564,418,018.5                   2,118,904,495.
                                              4.92%                            19.37% -14.45% contract collection period into contract
receivable                        9                                79
                                                                                                      asset accounts according to the new
                                                                                                      income standards




                                                                                                                                             22
                                                                                   Interim Report 2020 of China Fangda Group Co., Ltd.


                        779,903,495.4
Inventory                                        6.79% 750,395,540.06           6.86%   -0.07%
                                    6

Investment real         5,517,829,915.                  5,285,303,323.
                                             48.06%                         48.31%      -0.25%
estate                             07                              58

Long-term share
                        56,847,038.74            0.50% 69,779,924.33            0.64%   -0.14%
equity investment

                        484,397,283.6
Fixed assets                                     4.22% 431,948,450.66           3.95%    0.27%
                                    8

Construction in         138,881,024.2
                                                 1.21% 90,993,650.25            0.83%    0.38%
process                             7

                        1,280,635,666.
Short-term loans                             11.15% 900,000,000.00              8.23%    2.92%
                                   66

                        1,151,161,462.
Long-term loans                              10.03% 593,978,153.39              5.43%    4.60%
                                   35

                                                                                                 This is due to the classification of
                                                                                                 payments that have not yet reached the
                        1,699,157,345.
Contract assets                              14.80%               0.00          0.00%   14.80% contract collection period into contract
                                   00
                                                                                                 asset accounts according to the new
                                                                                                 income standards

Other current           329,749,353.1
                                                 2.87% 114,294,388.81           1.04%    1.83%
assets                              0

Non-current
                        151,617,767.5                                                            Repayment of long-term loans due
liabilities due in 1                             1.32% 800,000,000.00           7.31%   -5.99%
                                    9                                                            within 1 year
year


2. Assets and liabilities measured at fair value

√ Applicable □ Inapplicable
                                                                                                                                    In RMB

                                                   Accumulative
                                                     changes in
                                    Gain/loss
                                                     fair value   Impairment       Amount
                       Opening      caused by                                                   Amount sold        Other        Closing
       Item                                         accounting    provided in    purchased in
                       amount       changes in                                                   in the period    change        amount
                                                      into the     the period     the period
                                    fair value
                                                      income
                                                      account

Financial
assets

1.                                                                                2,337,919,96 2,332,471,10                   18,005,336.
                  10,330,062.18 2,226,413.78
Transactional                                                                            5.42             4.66                           72



                                                                                                                                          23
                                                                                     Interim Report 2020 of China Fangda Group Co., Ltd.


financial
assets
(excluding
derivative
financial
assets)

2. Derivative
                                                                                176,453,070. 83,087,985.0                       1,815,676.3
financial                                          1,815,676.34
                                                                                            00               0                           4
assets

3. Investment
                                                  -15,271,813.3                                                                 20,140,037.
in other        20,660,181.44      -520,143.59
                                                             5                                                                          85
equity tools

                                                  -13,456,137.0                 2,514,373,03 2,415,559,08                       39,961,050.
Subtotal        30,990,243.62 1,706,270.19
                                                             1                             5.42           9.66                          91

Investment      5,306,116,360                                                                                                   5,312,035,8
                                                  11,675,404.61                 5,919,471.95
real estate                  .12                                                                                                     32.07

Other
non-current                                                                                                                     5,018,835.3
                    5,009,728.02       9,107.28
financial                                                                                                                                0
assets

                5,342,116,331                                                   2,520,292,50 2,415,559,08                       5,357,015,7
Total                              1,715,377.47 -1,780,732.40
                             .76                                                           7.37           9.66                       18.28

Financial
                      96,767.62                      96,767.62                                                                        0.00
liabilities

Other change
Major changes in the assets measurement property of the Company in the report period
□ Yes √ No


3. Right restriction of assets at the end of the period

                         Item                             Closing book value                              Reason
Monetary capital                                                   444,757,864.32              Margin, pledged deposits, etc.
Inventory                                                           99,936,207.50                     Loan by pledge
Fixed assets                                                        64,242,861.97                     Loan by pledge
Intangible assets                                                   19,990,230.04                     Loan by pledge
100% stake in Fangda Property Development held                     200,000,000.00                     Loan by pledge
by the Company
Investment real estate                                            2,803,546,306.33                    Loan by pledge
Other current assets                                               201,790,136.99                    Pledge financing
Construction in process                                             31,053,433.16                     Loan by pledge
Total                                                             3,865,317,040.31

                                                                                                                                         24
                                                                                         Interim Report 2020 of China Fangda Group Co., Ltd.


VI. Investment

1. General situation

□ Applicable √ Inapplicable


2. Major equity investment in the report period

□ Applicable √ Inapplicable


3. Major non-equity investment in the report period

□ Applicable √ Inapplicable


4. Financial assets measured at fair value

√ Applicable □ Inapplicable
                                                                                                                                           In RMB

                                                     Accumulative
                                       Gain/loss     changes in fair
                       Initial                                                             Amount           Total
                                      caused by          value         Amount in this                                      Closing     Capital
 Assets category investment                                                               sold in this investment
                                      changes in     accounting into       period                                          amount      source
                        cost                                                                period         income
                                       fair value      the income
                                                        account

                                                                                          57,889,035. -1,476,190. 83,817,515. Self-owned
Futures                                283,960.00      1,760,150.00 141,706,550.00
                                                                                                     00             00           00 fund

Derivative
                    21,659,950                                                            25,198,950.                    31,207,520. Self-owned
financial                             -156,787.17        152,293.96 34,746,520.00                         -309,081.13
                                .00                                                                  00                          00 fund
instrument

                    10,330,062                                         2,337,919,965. 2,332,471,1 2,226,413.7 18,005,336. Self-owned
Others                                2,226,413.78
                                .18                                                 42         04.66                8            72 fund

                    31,990,012                                         2,514,373,035. 2,415,559,0                        133,030,371
Total                                 2,353,586.61     1,912,443.96                                       441,142.65                       --
                                .18                                                 42         89.66                             .72


5. Financial assets investment

(1) Securities investment

□ Applicable √ Inapplicable
The Company made no investment in securities in the report period




                                                                                                                                                 25
                                                                                            Interim Report 2020 of China Fangda Group Co., Ltd.


(2) Derivative investment

√ Applicable □ Inapplicable
                                                                                                                                             In RMB10,000

                                                                                                                                          Proporti
                                                                                                                                           on of
                                                                                                                                          closing
                                                                                                                                          investm
Derivati
                                                                                                                   Impairm                  ent       Actual
     ve                                                                      Initial                     Amount               Closing
                    Related                                                                Amount                    ent                  amount gain/los
investm Relation                            Initial        Start     End     investm                     sold in              investm
                    transacti       Type                                                   in this                 provisio                in the     s in the
     ent     ship                          amount          date      date      ent                        this                  ent
                         on                                                                period                   n (if                 closing     report
operator                                                                     amount                      period               amount
                                                                                                                    any)                    net       period
    name
                                                                                                                                          assets in
                                                                                                                                            the
                                                                                                                                           report
                                                                                                                                           period

Shangha
i                               Shanghai               06
                                                                   30 June                 14,170.                             8,381.7
Futures No          No          aluminu               0 Februar                        0                 5,788.9                            1.62% -147.62
                                                                   2020                         66                                    5
Exchan                          m                      y 2020
ge

                                Forward
                                                       2
                                foreign                            30 June                 3,474.6                             3,120.7
Banks       No      No                        2,166 August                     2,166                     2,519.9                            0.60% -30.91
                                exchang                            2020                              5                                5
                                                       2019
                                e

                                                                                           17,645.
Total                                         2,166         --        --       2,166                     8,308.8            0 11,502.5      2.22% -178.53
                                                                                                31

Capital source                             Self-owned fund

Lawsuit involved                           None

Disclosure date of derivative
investment approval by the Board of 16 April 2020
Directors

Disclosure date of derivative
investment approval by the                 None
shareholders’ meeting

                                           The company's aluminum futures hedging and foreign exchange derivatives trading business
Risk analysis and control measures
                                           are all derivatives investment business. The company has established and implemented the
for the derivative holding in the
                                           "Derivatives Investment Business Management Measures" and "Commodity Futures
report period (including without
                                           Hedging Business Internal Control and Risk Management System". It has made clear
limitation market, liquidity, credit,
                                           regulations on the approval authority, business management, risk management, information
operation and legal risks)
                                           disclosure and file management of derivatives trading business, which can effectively control

                                                                                                                                                             26
                                                                                    Interim Report 2020 of China Fangda Group Co., Ltd.


                                           the risk of the company's derivatives holding positions.

Changes in the market price or fair
value of the derivative in the report
period, the analysis of the
                                           Fair value of derivatives are measured at open prices in the open market
derivative’s fair value should disclose
the method used and related
assumptions and parameters.

Material changes in the accounting
policies and rules related to the
                                           None
derivative in the report period
compared to last period

Opinions of independent directors on
the Company’s derivative investment None
and risk controlling


VI. Major assets and equity sales

1. Major assets sales

□ Applicable √ Inapplicable
The Company sold no assets in the report period.


2. Major equity sales

□ Applicable √ Inapplicable


VII. Analysis of major joint stock companies

√ Applicable □ Inapplicable
Major subsidiaries and joint stock companies affecting more than 10% of the Company’s net profit
                                                                                                                                     In RMB

                                        Main        Registered                                                 Operation
  Company              Type                                       Total assets   Net assets     Turnover                       Net profit
                                      business          capital                                                  profit

                                    Subway
Fangda                                             105,000,000. 746,091,181. 249,195,140. 332,076,847. 42,733,123
               Subsidiaries         screen door                                                                               33,325,022.41
Zhichuang                                          00                       44             26            55            .65
                                    and service

Fangda                                             200,000,000. 6,369,099,13 2,378,852,68 35,306,837.7
               Subsidiaries         Real estate                                                                269,790.50       135,247.16
Property                                           00                     0.78           4.68              7

                                    Curtain wall
Fangda                                             500,000,000. 3,926,118,66 1,148,935,99 782,376,716. 134,281,51
               Subsidiaries         system and                                                                               117,948,463.80
Jianke                                             00                     8.87           4.25            80           4.88
                                    materials

Acquisition and disposal of subsidiaries in the report period

                                                                                                                                            27
                                                                                  Interim Report 2020 of China Fangda Group Co., Ltd.


√ Applicable □ Inapplicable

                                                Acquisition and disposal of subsidiaries in    Impacts on overall production, operation
                   Company
                                                             the report period                            and performance

Fangda Jianke Hong Kong Co., Ltd.               Newly set                                     None

Major joint-stock companies
In this period, a newly established subsidiary indirectly controlled, namely Jianke Hong Kong Company, was newly added to the
consolidated statement of the current period.


VIII. Structural entities controlled by the Company

□ Applicable √ Inapplicable


IX. Forecast of operating performance between January and September in 2020

Warning and reasons of possible net loss or substantial change from the last period between the beginning of the year and the end of
the next report period
□ Applicable √ Inapplicable


X. Risks facing the company and measures

     1. Market risks and measures
     The outbreak of the epidemic this year has caused a greater impact and impact on the market. As the overall designing and
engineering quality continues improving in the domestic construction curtain wall industry, curtain wall products will become
increasingly standard, intensifying the market competition. In this regard, the company will continue to adopt a forward-looking and
prudent operating policy, and achieve the goal of improving organizational efficiency and speeding up the return of funds through
refined management and technological innovation. Improve product quality, reduce product costs through new technologies and new
processes, flexibly respond to market changes, and improve the company's economic benefits.
     2. Management risks and measures
     In recent years, with the company's high-end curtain wall and material system industry, rail transit screen door industry orders
increasing year by year and the company's real estate property sector increased, the company's assets, business, personnel and other
aspects have expanded significantly, the organizational structure and management system will tend to Due to the complexity, the
company may face the management risk of industrial scale expansion. The Company will continue to improve the management mode,
integrate business management, optimize the business flow, seeking to build a high-efficient and solid management team. We will
introduce high-quality, professional technical and management talents in different fields to strengthen the Company's core
competitiveness.
     3. Production and operation risks and measures
     The macro-economy and market demand have added to the fluctuation in prices of main raw materials such as aluminum and
steel and labor, affecting the Company’s profitability and creating additional production and operation risks for the Company. The
Company has sought to lower the purchase and production costs, increase technical R&D, reduce consumption of raw materials,
introduce automatic and intelligent production equipment, strengthen staff training to improve working efficiency. At the same time,
we will advance the construction of smart factories in an orderly manner, empower advanced science and technology into production
and operation, abandon human tactics, reduce manufacturing costs, reduce labor costs, and improve corporate efficiency.
     4. Real estate industry risks and countermeasures



                                                                                                                                          28
                                                                                 Interim Report 2020 of China Fangda Group Co., Ltd.


     The real estate industry is obviously affected by the country 's macro-control, and the company needs to review the situation and
further strengthen the forward-looking research on the economic situation, policies and industry situation, and the capital market,
enhance predictive power, improve the control and resilience of risk factors, and timely adjust business strategies to adapt to the new
economic normal and new changes in the real estate industry. At the same time, the company will increase its efforts to eliminate the
cash and ensure that the company continues to maintain stable operation and healthy development by withdrawing cash.




                                                                                                                                      29
                                                                                Interim Report 2020 of China Fangda Group Co., Ltd.




                                        Chapter V Significant Events

I. Annual and extraordinary shareholder meetings held during the report period

1. Annual shareholder meeting during the report period


                                        Participati
       Meeting                  Type       on of             Date             Date of disclosure    Index for information disclosure
                                         investors

                                                                                                   Notice on Resolutions of the
                       Annual
2019 Annual                                                                                        Annual Shareholders’ Meeting
                       shareholders’      24.66% 8 May 2020               09 May 2020
Shareholder Meeting                                                                                (2019) (2020-25) released on
                       meeting
                                                                                                   www.cninfo.com.cn


2. Shareholders of preference shares of which voting right resume convening an extraordinary
shareholders’ meeting

□ Applicable √ Inapplicable


II. Profit Distribution and Reserve Capitalization in the Report Period

□ Applicable √ Inapplicable
The Company distributed no cash dividends or bonus shares and has no reserve capitalization plan.


III. Commitments that have been fulfilled and not fulfilled by actual controller, shareholders,
related parties, acquirers of the Company

□ Applicable √ Inapplicable
There is no commitment that has not been fulfilled by actual controller, shareholders, related parties, acquirers of the Company


IV. Engaging and dismissing of CPA

Whether the interim financial report is audited
□ Yes √ No
The interim report for H1 2015 has not been audited.


V. Statement of the Board on the “non-standard auditors’ report” issued by the CPA on the
current report period

□ Applicable √ Inapplicable




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                                                                                 Interim Report 2020 of China Fangda Group Co., Ltd.


VI. Statement of the Board of Directors on the Non-standard Auditor’s Report for H1 2014

□ Applicable √ Inapplicable


VII. Bankruptcy and capital reorganizing

□ Applicable √ Inapplicable
The Company has no bankruptcy or reorganization events in the report period.


VIII. Lawsuit

Significant lawsuit and arbitration
□ Applicable √ Inapplicable
The Company has no significant lawsuit or arbitration affair in the report period.
Other lawsuit
√Applicable □ Inapplicable
As of the end of the reporting period, among thelitigation that has not been judged, the total litigation amount in which thecompany
and its subsidiaries serve as the plaintiff is RMB61,704,994.09, and that as the defendant is RMB136,435,911.84.


IX. Media questioning

□ Applicable √ Inapplicable
The Company has no significant affair that arouses media questioning.


X. Punishment and rectification

□ Applicable √ Inapplicable
The Company received no penalty and made no correction in the report period.


XI. Credibility of the Company, controlling shareholder and actual controller

□ Applicable √ Inapplicable


XII. Share incentive schemes, staff shareholding program or other incentive plans

□ Applicable √ Inapplicable
There is no share incentive schemes, staff shareholding program or other incentive plans in the report period


XIII. Material related transactions

1. Related transactions related to routine operation

□ Applicable √ Inapplicable
The Company made no related transaction related to daily operating in the report period.

                                                                                                                                   31
                                                                                 Interim Report 2020 of China Fangda Group Co., Ltd.


2. Related transactions related to assets transactions

□ Applicable √ Inapplicable
The Company made no related transaction of assets or equity requisition and sales in the report period.


3. Related transactions related to joint external investment

√ Applicable □ Inapplicable

                                                           Main         Registered   Total assets of   Net assets of   Net profit of
                                                        business of capital of the    the invested     the invested    the invested
 Co-investor    Relationship       Invested company
                                                        the invested     invested     company (in      company (in     company (in
                                                         company         company      RMB10,000)       RMB10,000)      RMB10,000)

               A company
               controlled by
                                Shenzhen Lifu
               Mr. Xiong
Shenzhen                        Investment Co., Ltd.    Project
               Jianming, the
Zhuo Shun                       (Proposed by the Board investment, RMB1
               actual                                                                            250             250                   0
Investment                      of Directors: Shenzhen investment      million
               controller,
Co., Ltd.                       Qianhai Investment Co., consultancy
               chairman and
                                Ltd.)
               president of
               the company.

Progress of major
construction projects in the    None
invested enterprise (if any)


4. Related credits and debts

□ Applicable √ Inapplicable
The Company had no related debt in the report period.


5. Other major related transactions

□ Applicable √ Inapplicable
The Company has no other significant related transaction in the report period.


XIV. Non-operating capital use by the controlling shareholder or related parties in the
reporting term

□ Applicable √ Inapplicable
The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report period.




                                                                                                                                       32
                                                                                Interim Report 2020 of China Fangda Group Co., Ltd.


XV. Significant contracts and performance

1. Asset entrusting, leasing, contracting

(1) Asset entrusting

□ Applicable √ Inapplicable
The Company made no custody in the report period.


(2) Contracting

□ Applicable √ Inapplicable
The Company made no contract in the report period


(3) Leasing

□ Applicable √ Inapplicable
Leasing
The company does not have a major lease contract.


2. Significant guarantee

√ Applicable □ Inapplicable


(1) Guarantee

                                                                                                                        In RMB10,000

                  External guarantees made by the Company and subsidiaries (exclude those made for subsidiaries)

     Guarantee          Date of    Guarantee                   Actual amount         Type of                      Complete Related
                                                Actual date                                          Term
    provided to       disclosure    amount                       of guarantee        guarantee                    d or not     party

None

                                                Guarantee provided to subsidiaries

     Guarantee          Date of    Guarantee                   Actual amount         Type of                      Complete Related
                                                Actual date                                          Term
    provided to       disclosure    amount                       of guarantee        guarantee                    d or not     party

                                                                                                 since engage
                     24 April                                                                    of contract to
Fangda Jianke                         30,000 28 August 2018          12,225.04 Joint liability                    No         Yes
                     2018                                                                        2 years upon
                                                                                                 due of debt

                                                                                                 since engage
                     30 January                                                                  of contract to
Fangda Jianke                         40,000 17 April 2019           17,280.75 Joint liability                    No         Yes
                     2019                                                                        2 years upon
                                                                                                 due of debt


                                                                                                                                       33
                                                                  Interim Report 2020 of China Fangda Group Co., Ltd.


                                                                                     since engage
                    30 January                                                       of contract to
Fangda Jianke                    30,000 1 August 2019    15,413.42 Joint liability                    No   Yes
                    2019                                                             2 years upon
                                                                                     due of debt

Fangda Jianke,                                                                       since engage
Zhichuang           30 January                                                       of contract to
                                 90,000 26 March 2019    28,545.48 Joint liability                    No   Yes
Company and the     2019                                                             2 years upon
company                                                                              due of debt

                                                                                     since engage
                    30 January                                                       of contract to
Fangda Jianke                    25,000 20 August 2019    9,967.85 Joint liability                    No   Yes
                    2019                                                             2 years upon
                                                                                     due of debt

                                                                                     since engage
Fangda Jianke and
                    30 January            18 December                                of contract to
Zhichuang                        14,000                   9,199.88 Joint liability                    No   Yes
                    2019                  2019                                       2 years upon
Company
                                                                                     due of debt

                                                                                     since engage
                    30 January                                                       of contract to
Fangda Jianke                    10,000 21 June 2019         3,300 Joint liability                    No   Yes
                    2019                                                             2 years upon
                                                                                     due of debt

                                                                                     since engage
                    24 April                                                         of contract to
Fangda Zhichuang                 21,600 6 August 2018    24,137.58 Joint liability                    No   Yes
                    2018                                                             2 years upon
                                                                                     due of debt

                                                                                     since engage
                    30 January                                                       of contract to
Fangda Zhichuang                 20,000 1 August 2019     5,560.87 Joint liability                    No   Yes
                    2019                                                             2 years upon
                                                                                     due of debt

                                                                                     since engage
                    30 January                                                       of contract to
Fangda Zhichuang                 15,000 27 May 2019       6,495.79 Joint liability                    No   Yes
                    2019                                                             2 years upon
                                                                                     due of debt

                                                                                     Three years
                                                                                     from the
                                                                                     effective date
                                                                                     of the main
                    18 April                                                         contract to
Fangda Zhichuang                  3,000 29 June 2020         3,000 Joint liability                    No   Yes
                    2020                                                             the expiry
                                                                                     date of the
                                                                                     debt
                                                                                     performance
                                                                                     period


                                                                                                                  34
                                                                                    Interim Report 2020 of China Fangda Group Co., Ltd.


                                                                                                      since engage
Fangda New          30 January                                                                        of contract to
                                         8,000 24 April 2019                954.84 Joint liability                     No         Yes
Material            2019                                                                              2 years upon
                                                                                                      due of debt

                                                                                                      since engage
Fangda New          18 April                                                                          of contract to
                                         6,500 23 May 2020                1,783.67 Joint liability                     No         Yes
Material            2020                                                                              2 years upon
                                                                                                      due of debt

                                                                                                      since engage
                    30
                                                 25 February                                          of contract to
Fangda Property     November           135,000                              99,000 Joint liability                     No         Yes
                                                 2020                                                 2 years upon
                    2019
                                                                                                      due of debt

                                                                                                      since engage
                    30 January                                                                        of contract to
Fangda Property                         20,000 19 June 2019                 19,000 Joint liability                     No         Yes
                    2019                                                                              2 years upon
                                                                                                      due of debt

                                                                                                      since engage
Qingling            30 January                                                                        of contract to
                                         8,000 10 July 2019               4,091.15 Joint liability                     No         Yes
Technology          2019                                                                              2 years upon
                                                                                                      due of debt

Total of guarantee to                                              Total of guarantee to
subsidiaries approved in the                             550,000 subsidiaries actually occurred                                   243,824.05
report term (B1)                                                   in the report term (B2)

                                                                   Total of balance of guarantee
Total of guarantee to
                                                                   actually provided to the
subsidiaries approved as of the                          713,000                                                                  259,956.32
                                                                   subsidiaries as of end of report
report term (B3)
                                                                   term (B4)

                                                   Guarantee provided to subsidiaries

    Guarantee            Date of     Guarantee                     Actual amount        Type of                        Complete Related
                                                   Actual date                                            Term
    provided to         disclosure    amount                         of guarantee       guarantee                      d or not      party

Total of guarantee provided by the Company (total of the above three)

Total of guarantee approved in                                     Total of guarantee occurred in
                                                         550,000                                                                  243,824.05
the report term (A1+B1+C1)                                         the report term (A2+B2+C2)

Total of guarantee approved as                                     Total of guarantee occurred as
of end of report term                                    713,000 of the end of report term                                        259,956.32
(A3+B3+C3)                                                         (A4+B4+C4)

Percentage of the total guarantee occurred (A4+B4+C4) on net
                                                                                                                                     50.22%
asset of the Company

Including:

Guarantees provided to the shareholders, substantial                                                                                    0.00


                                                                                                                                             35
                                                                                 Interim Report 2020 of China Fangda Group Co., Ltd.


controllers and the related parties (D)

Guarantee provided directly or indirectly to objects with over
                                                                                                                               19,000
70% of liability on asset ratio (E)

Amount of guarantee over 50% of the net asset (F)                                                                             1,117.52

Total of the above 3 (D+E+F)                                                                                                   19,000

Note of immature guarantee with guarantee liabilities or
                                                                  None
possible joint damage liabilities in the report period

Statement of external guarantees violating the procedure (if
                                                                  None
any)


(2) Incompliant external guarantee

□ Applicable √ Inapplicable
The Company made no incompliant external guarantee in the report period.


3. Entrusted wealth management

√ Applicable □ Inapplicable
                                                                                                                        In RMB10,000

                                                                                                              Due balance to be
             Type                Source of fund                  Amount               Undue balance
                                                                                                                  recovered

Bank financial products Self-owned fund                                  47,313.01              1,800.53                            0

Total                                                                    47,313.01              1,800.53                            0

Specific circumstances of high-risk entrusted financing with large individual amount or low security, poor liquidity, and no cost
protection
□ Applicable √ Inapplicable
Entrusted financial management expected to fail to recover the principal or likely result in impairment
□ Applicable √ Inapplicable


4. Other significant contract

□ Applicable √ Inapplicable
The Company entered into no other significant contract in the report.


XVI Social responsibilities

1. Environmental protection

Whether the Company and its subsidiaries are key polluting companies disclosed by the environmental protection authority
No
The Company and its subsidiaries have earnestly implemented the Environmental Protection Law of the People's Republic of China,


                                                                                                                                    36
                                                                                Interim Report 2020 of China Fangda Group Co., Ltd.


the Law of the People's Republic of China on Water Pollution Prevention and Control, the Law of the People's Republic of China on
the Prevention and Control of Air Pollution, and the Law of the People's Republic of China on the Prevention and Control of Solid
Waste Pollution. In the environmental protection laws and regulations, there were no penalties for violations of laws and regulations
during the reporting period.




2. Performance of poverty relieving responsibilities

(1) Half-year poverty relieving summary

  In the first half of 2020, the Company used funds for epidemic control and precision poverty alleviation projects of
  RMB7,754,000 as follows:
  In order to prevent and control the COVID-19 epidemic, the company supports the medical staff who are on the front line of the
  epidemic, respectively donating 2 million yuan to the Wuhan Red Cross Society and 1 million yuan to the Jiangxi Red Cross
  Foundation to purchase prevention and control materials and incentivize the frontline medical personnel;
  2. To help the large tenants in Shenzhen, the company has reduced the rent by 2.52 million yuan.
  3. Members and employees of the company organize to fight against epidemic and donate RMB120,500;
  4. The Company donated 2 million yuan to the Jiangxi Red Cross Foundation to support poverty alleviation in Akto County,
  Xinjiang;
  5. The company donated RMB1,000 to the Shenzhen Property Management Industry Committee of the Communist Party of China
  for poverty alleviation in Guangdong Province;
  6. The company donated mask 50,000 to Nanchang's Xinjian District, with a conversion fund of RMB112,500.


(2) Result of targeted poverty alleviation


                                Specifications                                    Unit                   Qty/Description

1. General situation                                                              ——                         ——

  Including: 1. capital                                                     (in RMB10,000)                                    764.15

          2. Value of materials                                             (in RMB10,000)                                     11.25

II. Investment                                                                    ——                         ——

  1. Industry development poverty relief                                          ——                         ——

  2. Employment transfer                                                          ——                         ——

  3. Relocation                                                                   ——                         ——

  4. Education                                                                    ——                         ——

  5. Health care support                                                          ——                         ——

  6. Eco-protection support                                                       ——                         ——

  7. Last-line guarantee                                                          ——                         ——

  8. Social poverty relieving                                                     ——                         ——

              8.2 Targeted poverty alleviation investment amount            (in RMB10,000)                                    200.10

  9. Others                                                                       ——                         ——



                                                                                                                                    37
                                                                                  Interim Report 2020 of China Fangda Group Co., Ltd.


III. Prizes                                                                        ——                          ——


(3) Further property relief plans

The Company will continue to fulfill its social responsibility for precision poverty alleviation, and make donations from time to time
based on business development.


XVII. Other material events

√ Applicable □ Inapplicable

        At its second meeting, on 23 June 2020, the 9th Board of Directors of the Company considered and adopted the Company's

proposals on joint investment with affiliates and related transactions, on joint investment with controlling subsidiaries and on transfer

of shares in wholly owned subsidiaries. For details, see the Company's bulletins published on 24 June 2020 in the Securities Times,

China Securities, Shanghai Securities, Hong Kong Commerce (English) and www.cninfo.com.cn (Notice No.: 2020-32, 2020-34,

2020-35, 2020-36).

      The progress of the above matters is as follows: the company's wholly-owned subsidiary Shenzhen Hongjun Investment Co.,

Ltd., Shenzhen Fangda New Energy Co., Ltd. (funded by its wholly-owned subsidiary Shenzhen Xunfu Investment Co., Ltd.) and

related parties Shenzhen Zhuo Shun Investment Co., Ltd. Co-funded and established Shenzhen Lifu Investment Co., Ltd. (the name

proposed by the board of directors: Shenzhen Qianhai Shengfa Investment Co., Ltd.), which has completed the industrial and

commercial registration procedures and obtained a business license; the company and its holding subsidiary Shenzhen Lifu

Investment Co., Ltd. The company jointly funded the establishment of Shenzhen Fangda Investment Partnership (Limited Partnership)

(the name proposed by the board of directors: Shenzhen Qianhai Fangda Investment Partnership (Limited Partnership)), which has

completed the business registration procedures and obtained a business license.

      To date, the company has fully received the share transfer transaction price paid by Shenzhen Fangda Zhixiang Technology Co.,

Ltd., and has completed the registration procedure of the change of ownership transfer. Shenzhen Fangda Jianke Group Co., Ltd., a

subsidiary of the company, has fully received the share transfer transaction price of Fangda Zhixiang Technology Co., Ltd., which is

paid by Fangda Zhixiang Technology Co., Ltd.
      The joint investment and affiliated transaction between the company and its affiliates, joint investment partnership with holding
subsidiaries and share transfer of wholly owned subsidiaries have been completed.


XVIII. Material events of subsidiaries

□ Applicable √ Inapplicable




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                                                                                  Interim Report 2020 of China Fangda Group Co., Ltd.




                Chapter VI Changes in Share Capital and Shareholders

I. Changes in shares

1. Changes in shares

                                                                                                                                        In share

                                 Before the change                           Change (+,-)                                 After the change

                                                        Issued                Transferre
                                                                    Bonus                                                            Proportio
                                Quantity Proportion      new                    d from       Others       Subtotal       Quantity
                                                                    shares                                                              n
                                                        shares                 reserves

I. Shares with trade
                                1,431,568     0.13%                                            11,375       11,375 1,442,943            0.13%
restriction conditions

1. Other domestic shares        1,431,568     0.13%                                            11,375       11,375 1,442,943            0.13%

        Domestic natural
                                1,431,568     0.13%                                            11,375       11,375 1,442,943            0.13%
person shares

II. Shares without trading      1,121,952,                                                  -35,116,61 -35,116,61 1,086,836
                                             99.87%                                                                                    99.87%
limited conditions                    621                                                             3              3        ,008

                                678,283,9                                                                                678,272,5
1. Common shares in RMB                      60.38%                                           -11,375      -11,375                     62.33%
                                       04                                                                                      29

2. Foreign shares in            443,668,7                                                  -35,105,23 -35,105,23 408,563,4
                                             39.49%                                                                                    37.54%
domestic market                        17                                                             8              8         79

                                1,123,384,                                                 -35,105,23 -35,105,23 1,088,278
III. Total of capital shares                 100.00%                                                                                 100.00%
                                      189                                                             8              8        ,951

Reasons
√ Applicable □ Inapplicable
     1. From April 3, 2020 to May 12, 2020, the company completed the repurchase of some domestically listed foreign shares (B
shares) in 2019 through centralized bidding, and the cumulative number of B shares repurchased without selling restrictions was
35,105,238 On May 20, 2020, the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. completed the repurchase
and cancellation procedures. The unrestricted B shares decreased by 35,105,238 shares, and the total share capital decreased from
1,123,384,189 shares to 1,088,278,951 shares.
     2. Mr. Ye Zhiqing, the employee representative supervisor of the company, resigned on May 8, 2020. He holds 19,100 A shares
of the company, 14,325 shares subject to sales restrictions and 4,775 shares subject to restrictions on sales before he resigns. All the
shares need to be locked within half a year after leaving office. Therefore, 4,775 shares of restricted shares were added, and 4,775
shares of restricted shares were reduced.
     3. Mr. Fan Xiaodong, a supervisor elected by the company’s 2019 annual general meeting on May 8, 2020, holds 8,800 A shares
of the company. Starting from May 11, 2020, 6,600 shares of which are subject to sales restrictions Regarding the locked shares,
6,600 shares were added to the restricted shares and 6,600 shares were not restricted.



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                                                                                 Interim Report 2020 of China Fangda Group Co., Ltd.


Approval of the change
√ Applicable □ Inapplicable
    1. The company's 2019 repurchase of certain domestically listed foreign shares (B shares) related matters, respectively, on
November 28, 2019, and December 16, 2019. The nineteenth meeting of the eighth board of directors and Deliberated and approved
at the first extraordinary general meeting of shareholders in 2019.
    2. On May 8, 2020, Mr. Fan Xiaodong was elected as a supervisor at the company's 2019 annual general meeting.


Share transfer
√ Applicable □ Inapplicable
The company repurchased some 35,105,238 shares of domestically listed foreign shares (B shares) in 2019, and completed the share
repurchase and cancellation procedures at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited on
May 20, 2020.


Progress in the implementation of share repurchase
√ Applicable □ Inapplicable
      1. The company repurchased some 35,105,238 shares of domestically listed foreign shares (B shares) in 2019. The repurchase
and cancellation procedures were completed on May 20, 2020. For details, please refer to the company’s "About Repurchase of
Shares" disclosed on May 22, 2020. Announcement of completion of cancellation."
      2. The company's 2020 plan to repurchase some domestically listed foreign shares (B shares) has been reviewed and approved
at the second meeting of the company's ninth board of directors on June 23, 2020. According to the company's repurchase plan, the
total amount of repurchase funds shall not exceed RMB 50 million (inclusive) (including foreign exchange, transaction fees and other
related expenses), and the price of the repurchased shares shall not exceed 3.47 Hong Kong dollars per share (inclusive). The upper
limit of the number of shares to be repurchased is 31.158 million shares, and the lower limit is 15.759 million shares. The specific
number of shares to be repurchased is subject to the actual number of shares repurchased at the expiration of the repurchase period.
The repurchased shares are planned to be cancelled. From the first share repurchase on July 23, 2020 to July 31, 2020, the company
repurchased 882,062 shares of the company’s B shares through a centralized bidding transaction through the special securities
repurchase account, which accounted for the company’s total share capital of 0.08%, the highest transaction price was HKD
3.23/share, the lowest transaction price was HKD 3.16/share, and the total payment amount was HKD 2,826,839.44 (excluding
transaction fees). For the above content, please refer to the relevant announcements disclosed by the company on June 24, 2020, July
24, 2020, and August 4, 2020.


Progress in the implementation of the reduction of shareholding shares by means of centralized bidding
□ Applicable √ Inapplicable
Impacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to common
shareholders of the company in the most recent year and period
√ Applicable □ Inapplicable

                                                         2019
              Item                                                                          January to June, 2020
                                       Before change                  After change
Basic earnings per share                                 0.31                        0.32                    0.13
Diluted earnings per share                               0.31                        0.32                    0.13
Net assets per share                                     4.61                        4.76                    4.76




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                                                                                             Interim Report 2020 of China Fangda Group Co., Ltd.


Others that need to be disclosed as required by the securities supervisor
□ Applicable √ Inapplicable


2. Changes in conditional shares

√ Applicable □ Inapplicable
                                                                                                                                                   In share

                      Conditiona
                      l shares at                                  Conditional shares
                                       Released       Increased                                   Reason of
Shareholder name beginning                                            at end of the                                          Date of releasing
                                       this period this period                                    condition
                        of the                                            period
                        period

Ye Zhiqing                14,325                  0       4,775                  19,100 Leaving office              11 November 2020

                                                                                           Newly elected            25% of the annual shareholding is
Fan Xiaodong                       0              0       6,600                    6,600
                                                                                           supervisor               released from the sale

Total                     14,325                  0      11,375                  25,700              --                                --


II. Share placing and listing

□ Applicable √ Inapplicable


III. Shareholders and shareholding

                                                                                                                                                   In share

                                                                            Number of shareholders of
Number of shareholders of
                                                                            preferred stocks of which voting
common shares at the end of                                        61,834                                                                               0
                                                                            rights recovered in the report
the report period
                                                                            period

                           Shareholders holding 5% of the Company's common shares or top-10 shareholders

                                                           Number                                                            Pledging or freezing
                                                              of
                                                           common        Change in Condition Unconditio
                                           Shareholdin
  Shareholder           Nature of                           shares           the             al              nal
                                                  g
        name           shareholder                        held at the reporting        common             common        Share status         Quantity
                                            percentage
                                                          end of the        period         shares          shares
                                                            report
                                                            period

Shenzhen
Banglin
                    Domestic non-state                    114,847,8                                       114,847,85
Technologies                                    10.55%                   5,200                                          Pledged               32,700,000
                    legal person                                    54                                              4
Development
Co., Ltd.


                                                                                                                                                        41
                                                                                   Interim Report 2020 of China Fangda Group Co., Ltd.


Shengjiu            Foreign legal                       104,127,4                          104,127,47
                                                9.57%               433,450
Investment Ltd. person                                        79                                      9

                    Domestic natural                    39,372,43
Fang Wei                                        3.62%               4,326,898              39,372,437
                    person                                     7

Gong Qing
Cheng Shi Li
He Investment
                    Domestic non-state                  26,791,48
Management                                      2.46%               -                      26,791,488
                    legal person                               8
Partnership
Enterprise
(limited partner)

VANGUARD
TOTAL
                    Foreign legal
INTERNATIO                                      0.64% 6,986,407 1,114,400                    6,986,407
                    person
NAL STOCK
INDEX FUND

VANGUARD
EMERGING
                    Foreign legal
MARKETS                                         0.58% 6,312,683 -1,633,800                   6,312,683
                    person
STOCK
INDEX FUND

Shenwan
Hongyuan
                    Foreign legal
Securities                                      0.52% 5,705,823 -1,925,473                   5,705,823
                    person
(Hong Kong)
Co., Ltd.

                    Domestic natural
Qu Chunlin                                      0.51% 5,557,161 1,250,150                    5,557,161
                    person

                    Domestic natural
Chen Sheng                                      0.46% 5,000,000 3,700,000                    5,000,000
                    person

First Shanghai
                    Foreign legal
Securities                                      0.36% 3,938,704 -63,000                      3,938,704
                    person
Limited

A strategic investor or ordinary
legal person becomes the Top10           None
shareholder due a stock issue.

                                         Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu
                                         Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology
Notes to top ten shareholder
                                         Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment Management Partnership
relationship or "action in concert"
                                         Enterprise are related parties. The Company is not notified of other action-in-concert or
                                         related parties among the other holders of current shares.


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                                                                              Interim Report 2020 of China Fangda Group Co., Ltd.


                                      Top 10 shareholders of unconditional common shares

                                                                                                        Category of shares
           Shareholder name           Amount of common shares without sales restriction           Category of
                                                                                                                      Quantity
                                                                                                    shares

Shenzhen Banglin Technologies                                                                  RMB common
                                                                                114,847,854                            114,847,854
Development Co., Ltd.                                                                          shares

                                                                                               Foreign shares
Shengjiu Investment Ltd.                                                        104,127,479 listed in domestic         104,127,479
                                                                                               exchanges

                                                                                               RMB common
Fang Wei                                                                         39,372,437                             39,372,437
                                                                                               shares

Gong Qing Cheng Shi Li He
Investment Management                                                                          RMB common
                                                                                 26,791,488                             26,791,488
Partnership Enterprise (limited                                                                shares
partner)

VANGUARD TOTAL                                                                                 Foreign shares
INTERNATIONAL STOCK                                                               6,986,407 listed in domestic            6,986,407
INDEX FUND                                                                                     exchanges

                                                                                               Foreign shares
VANGUARD EMERGING
                                                                                  6,312,683 listed in domestic            6,312,683
MARKETS STOCK INDEX FUND
                                                                                               exchanges

                                                                                               Foreign shares
Shenwan Hongyuan Securities
                                                                                  5,705,823 listed in domestic            5,705,823
(Hong Kong) Co., Ltd.
                                                                                               exchanges

                                                                                               RMB common
Qu Chunlin                                                                        5,557,161                               5,557,161
                                                                                               shares

                                                                                               RMB common
Chen Sheng                                                                        5,000,000                               5,000,000
                                                                                               shares

                                                                                               Foreign shares
First Shanghai Securities Limited                                                 3,938,704 listed in domestic            3,938,704
                                                                                               exchanges

No action-in-concert or related
parties among the top10             Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu
unconditional common share          Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology
shareholders and between the top10 Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment Management Partnership
unconditional common share          Enterprise are related parties. The Company is not notified of other action-in-concert or
shareholders and the top10 common related parties among the other holders of current shares.
share shareholders

Top-10 common share shareholders Shenzhen Banglin Technology Development Co., Ltd. holds 55,000,000 shares of the
participating in margin trade       company through the customer credit transaction guarantee securities account of Ping An


                                                                                                                                 43
                                                                           Interim Report 2020 of China Fangda Group Co., Ltd.


                                      Securities Co., Ltd.

Agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional common
shares in the report period
□ Yes √ No
No agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional common
shares in the report period


IV. Changes in controlling shareholder or actual controller

Changes in the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
No change in the controlling shareholder in the report period
Change in the actual controller in the report period
□ Applicable √ Inapplicable
No change in the actual shareholder in the report period




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                                                           Interim Report 2020 of China Fangda Group Co., Ltd.




                                     Chapter VII Preferred Shares

□ Applicable √ Inapplicable
The Company had no preferred share in the report period.




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                                            Interim Report 2020 of China Fangda Group Co., Ltd.




  Chapter VIII. Information about the Company’s Convertible Bonds

□ Applicable √ Inapplicable
No convertible bonds in the report period




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    Chapter IX Particulars about the Directors, Supervisors, and Senior

                                                         Management

I. Changes in shareholding of Directors, Supervisors and Senior Management

√ Applicable □ Inapplicable

                                                                                              Number of
                                             Number of                                                                        Number of
                                                                                 Number of     restricted
                                              shares     Increased Decreased                                  Number of       restricted
                                                                                   shares        shares
PRINTED                                       held at    shares in   shares in                                 restricted       shares
                 Position       Job status                                       held at end granted at
    NAME                                     beginning this period this period                               shares granted granted at the
                                                                                   of the         the
                                               of the     (share)    (share)                                 in this period   end of the
                                                                                   period     beginning of
                                              period                                                                            period
                                                                                               the period

Xiong       Chairman,
                                In office    1,889,657                           1,889,657
Jianming    president

Xiong
            Director            In office
Jianwei

Zhou        Director, vice
                                In office
Zhigang     president

            Director, vice
Lin Kebin                       In office
            president

Guo         Independent
                                In office
Jinlong     director

Huang       Independent
                                In office
Yaying      director

Cao
            Independent
Zhongxion                       In office
            director
g

            Supervisory
Dong        Committee
                                In office
Gelin       meeting
            convener

Cao Naisi Supervisor            In office

Fan
            Supervisor          In office                                             8,800
Xiaodong

Wei
            Vice president      In office
Yuexing


                                                                                                                                           47
                                                                                Interim Report 2020 of China Fangda Group Co., Ltd.


Xiao         Secretary of the
                                In office
Yangjian     Board

Guo          Independent
                                Resigned
Wanda        director

             Independent
Deng Lei                        Resigned
             director

Ye Zhiqing Supervisor           Resigned         19,100                          19,100

Total                --                --    1,908,757             0        0 1,917,557            0               0                 0


II. Changes in the Directors, Supervisors and Senior Executives

√ Applicable □ Inapplicable

  PRINTED NAME                     Job                      Type                DATE                          Reason

Guo Wanda                 Independent director    Leaving office       8 May 2020               Office term expires and re-elected

Deng Lei                  Independent director    Leaving office       8 May 2020               Office term expires and re-elected

                          Staff representative
Ye Zhiqing                                        Leaving office       8 May 2020               Office term expires and re-elected
                          supervisor

Zhou Zhigang              Secretary of the Board Leaving office        8 May 2020               Office term expires and re-elected

Huang Yaying              Independent director    Elected              8 May 2020               Office term expires and re-elected

Cao Zhongxiong            Independent director    Elected              8 May 2020               Office term expires and re-elected

Fan Xiaodong              Supervisor              Elected              8 May 2020               Office term expires and re-elected

Xiao Yangjian             Secretary of the Board Engaged               23 June 2020             Re-elected




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             Chapter X. Information about the Company’s Securities

Bonds publicly issued and listed in a securities exchange, immature or not fully paid by the approval date of the annual report
No




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                                                                              Interim Report 2020 of China Fangda Group Co., Ltd.




                                      Chapter XI Financial Statements

I. Auditor’s report

Whether the interim report is audited
□ Yes √ No
The financial statements for H1 2014 have not been audited.


II. Financial statements

Unit for statements in notes to financial statements: RMB yuan


1. Consolidated Balance Sheet

Prepared by: China Fangda Group Co., Ltd.
                                                           30 June 2020
                                                                                                                         In RMB

                   Item                                 30 June 2020                             31 December 2019

Current asset:

     Monetary capital                                              1,056,919,254.36                            1,209,811,978.95

     Settlement provision

     Outgoing call loan

     Transactional financial assets                                     18,005,336.72                             10,330,062.18

     Derivative financial assets                                         1,815,676.34

     Notes receivable                                                  164,526,921.14                            305,070,930.97

     Account receivable                                                564,418,018.59                          1,956,191,307.07

     Receivable financing                                                 300,000.00                               2,954,029.00

     Prepayment                                                         34,919,388.83                             21,327,109.18

     Insurance receivable

     Reinsurance receivable

     Provisions of Reinsurance
contracts receivable

     Other receivables                                                 158,674,891.12                            139,947,655.35

        Including: interest receivable

                 Dividend receivable

     Repurchasing of financial assets



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                                                     Interim Report 2020 of China Fangda Group Co., Ltd.


     Inventory                               779,903,495.46                             733,711,143.46

     Contract assets                        1,699,157,345.00

     Assets held for sales

     Non-current assets due in 1 year

     Other current assets                    329,749,353.10                             323,765,585.90

Total current assets                        4,808,389,680.66                          4,703,109,802.06

Non-current assets:

     Loan and advancement provided

     Debt investment

     Other debt investment

     Long-term receivables

     Long-term share equity investment        56,847,038.74                              57,222,240.83

     Investment in other equity tools         20,140,037.85                              20,660,181.44

     Other non-current financial assets         5,018,835.30                              5,009,728.02

     Investment real estate                 5,517,829,915.07                          5,522,391,984.11

     Fixed assets                            484,397,283.68                             477,332,830.92

     Construction in process                 138,881,024.27                             129,988,982.86

     Productive biological assets

     Gas & petrol

     Use right assets

     Intangible assets                        76,261,073.30                              78,322,265.05

     R&D expense

     Goodwill

     Long-term amortizable expenses             3,962,850.60                              3,875,198.12

     Deferred income tax assets              333,037,735.20                             343,349,564.70

     Other non-current assets                 37,015,653.00                              28,701,802.00

Total of non-current assets                 6,673,391,447.01                          6,666,854,778.05

Total of assets                            11,481,781,127.67                         11,369,964,580.11

Current liabilities

     Short-term loans                       1,280,635,666.66                            724,618,197.34

     Loans from Central Bank

     Call loan received

     Transactional financial liabilities

     Derivative financial liabilities                                                        96,767.62



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       Notes payable                       531,478,369.23                             578,816,027.44

       Account payable                    1,106,597,460.59                          1,190,773,300.24

       Prepayment received                   4,195,179.31                             136,340,104.73

       Contract liabilities                136,799,464.76

       Selling of repurchased financial
assets

       Deposit received and held for
others

       Entrusted trading of securities

       Entrusted selling of securities

       Employees' wage payable              24,593,468.01                              55,847,134.20

       Taxes payable                        21,287,400.76                              17,848,987.68

       Other payables                      712,243,884.21                             701,432,408.28

         Including: interest payable

                 Dividend payable

       Fees and commissions payable

       Reinsurance fee payable

       Liabilities held for sales

       Non-current liabilities due in 1
                                           151,617,767.59                             922,346,563.72
year

       Other current liabilities            61,298,475.68                             181,694,574.47

Total current liabilities                 4,030,747,136.80                          4,509,814,065.72

Non-current liabilities:

       Insurance contract provision

       Long-term loans                    1,151,161,462.35                            546,501,491.56

       Bond payable

         Including: preferred stock

                 Perpetual bond

       Lease liabilities

       Long-term payable

       Long-term employees’ wage
payable

       Anticipated liabilities               4,426,285.92                               7,793,527.16

       Deferred earning                     10,823,887.41                              10,817,247.40

       Deferred income tax liabilities    1,059,467,809.75                          1,063,833,159.00



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                                                                             Interim Report 2020 of China Fangda Group Co., Ltd.


     Other non-current liabilities

Total of non-current liabilities                                  2,225,879,445.43                            1,628,945,425.12

Total liabilities                                                 6,256,626,582.23                            6,138,759,490.84

Owner’s equity:

     Share capital                                                1,088,278,951.00                            1,123,384,189.00

     Other equity instruments

        Including: preferred stock

                 Perpetual bond

     Capital reserves                                                   1,454,191.59                              1,454,191.59

     Less: Shares in stock

     Other miscellaneous income                                          465,523.75                                -475,409.25

     Special reserves

     Surplus reserve                                                   95,525,281.06                            159,805,930.34

     Common risk provisions

     Undistributed profit                                         3,991,052,115.01                            3,898,626,177.99

Total of owner’s equity belong to the
                                                                  5,176,776,062.41                            5,182,795,079.67
parent company

     Minor shareholders’ equity                                       48,378,483.03                             48,410,009.60

Total of owners’ equity                                          5,225,154,545.44                            5,231,205,089.27

Total of liabilities and owner’s interest                       11,481,781,127.67                           11,369,964,580.11


Legal representative: Xiong Jianming         CFO: Lin Kebing           Accounting Manager: Wu Bohua


2. Balance Sheet of the Parent Company

                                                                                                                        In RMB

                    Item                                30 June 2020                            31 December 2019

Current asset:

     Monetary capital                                                  53,945,656.04                            175,591,953.63

     Transactional financial assets

     Derivative financial assets

     Notes receivable

     Account receivable                                                  864,942.73                                 297,813.76

     Receivable financing

     Prepayment                                                           68,553.45                                 250,205.32

     Other receivables                                            2,365,126,667.11                            1,973,381,342.74


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                                                    Interim Report 2020 of China Fangda Group Co., Ltd.


        Including: interest receivable

                  Dividend receivable

     Inventory

     Contract assets

     Assets held for sales

     Non-current assets due in 1 year

     Other current assets                       972,396.46                                 877,430.41

Total current assets                       2,420,978,215.79                          2,150,398,745.86

Non-current assets:

     Debt investment

     Other debt investment

     Long-term receivables

     Long-term share equity investment     1,065,202,785.05                            963,508,253.00

     Investment in other equity tools        18,604,010.22                              18,604,010.22

     Other non-current financial assets      30,000,001.00                              48,831,242.35

     Investment real estate                 295,355,002.00                             295,355,002.00

     Fixed assets                            66,247,900.80                              67,361,529.52

     Construction in process

     Productive biological assets

     Gas & petrol

     Use right assets

     Intangible assets                        1,676,556.82                               1,824,589.22

     R&D expense

     Goodwill

     Long-term amortizable expenses             891,188.86                                 934,669.73

     Deferred income tax assets              47,572,463.06                              44,408,630.81

     Other non-current assets

Total of non-current assets                1,525,549,907.81                          1,440,827,926.85

Total of assets                            3,946,528,123.60                          3,591,226,672.71

Current liabilities

     Short-term loans                       500,347,916.67                             300,442,988.19

     Transactional financial liabilities

     Derivative financial liabilities

     Notes payable



                                                                                                    54
                                                   Interim Report 2020 of China Fangda Group Co., Ltd.


       Account payable                         606,941.85                                 606,941.85

       Prepayment received                     728,878.76                                 746,761.55

       Contract liabilities

       Employees' wage payable               1,069,717.45                               3,215,013.16

       Taxes payable                           794,988.70                                 312,647.89

       Other payables                      941,804,220.47                             109,837,934.17

         Including: interest payable

                 Dividend payable

       Liabilities held for sales

       Non-current liabilities due in 1
                                            80,115,783.33                             520,872,206.95
year

       Other current liabilities

Total current liabilities                 1,525,468,447.23                            936,034,493.76

Non-current liabilities:

       Long-term loans                                                                 70,000,000.00

       Bond payable

         Including: preferred stock

                 Perpetual bond

       Lease liabilities

       Long-term payable

       Long-term employees’ wage
payable

       Anticipated liabilities

       Deferred earning

       Deferred income tax liabilities      64,201,364.63                              64,351,075.92

       Other non-current liabilities

Total of non-current liabilities            64,201,364.63                             134,351,075.92

Total liabilities                         1,589,669,811.86                          1,070,385,569.68

Owner’s equity:

       Share capital                      1,088,278,951.00                          1,123,384,189.00

       Other equity instruments

         Including: preferred stock

                 Perpetual bond

       Capital reserves                        360,835.52                                 360,835.52

       Less: Shares in stock


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                                                                Interim Report 2020 of China Fangda Group Co., Ltd.


       Other miscellaneous income                         1,287,629.38                               1,287,629.38

       Special reserves

       Surplus reserve                                   95,525,281.06                             159,805,930.34

       Undistributed profit                        1,171,405,614.78                               1,236,002,518.79

Total of owners’ equity                           2,356,858,311.74                               2,520,841,103.03

Total of liabilities and owner’s interest         3,946,528,123.60                               3,591,226,672.71


3. Consolidated Income Statement

                                                                                                           In RMB

                    Item                     H1 2020                                    H1 2019

1. Total revenue                                       1,251,608,064.42                           1,425,890,946.99

       Incl. Business income                           1,251,608,064.42                           1,425,890,946.99

              Interest income

              Insurance fee earned

              Fee and commission
received

2. Total business cost                                 1,157,918,504.87                           1,281,585,400.17

       Incl. Business cost                              970,370,412.06                            1,066,065,970.56

              Interest expense

              Fee and commission paid

              Insurance discharge payment

              Net claim amount paid

              Net insurance policy
responsibility reserves provided

              Insurance policy dividend
paid

              Reinsurance expenses

              Taxes and surcharges                        7,526,514.98                              41,481,000.07

              Sales expense                              20,978,235.09                              27,175,638.50

              Administrative expense                     62,559,463.16                              82,678,777.56

              R&D cost                                   51,599,310.87                              14,702,673.12

              Financial expenses                         44,884,568.71                              49,481,340.36

                 Including: interest cost                43,164,977.83                              40,476,886.48

                          Interest income                 6,952,304.21                               2,439,090.91

       Add: other gains                                    6,214,112.77                              4,001,450.51


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                                                        Interim Report 2020 of China Fangda Group Co., Ltd.


             Investment gains (―-‖ for loss)      -713,663.54                              4,056,397.16

             Incl. Investment gains from
                                                    -375,202.09                               -325,733.55
affiliates and joint ventures

                   Financial assets
                                                  -2,255,794.10
derecognised as a result of amortized cost

             Exchange gains ("-" for loss)

             Net open hedge gains (―-‖ for
loss)

             Gains from change of fair value
                                                       9,107.28                                121,506.67
(―-― for loss)

             Credit impairment ("-" for loss)     74,854,185.26                             -4,369,660.38

             Investment impairment loss
                                                           0.00
("-" for loss)

             Investment gains ("-" for loss)          -1,981.72                                -27,108.78

3. Operational profit ("-" for loss)             174,051,319.60                            148,088,132.00

        Plus: non-operational income                275,841.64                               4,873,892.15

        Less: non-operational expenditure          5,275,868.33                                378,565.80

4. Gross profit ("-" for loss)                   169,051,292.91                            152,583,458.35

        Less: Income tax expenses                 22,242,934.91                             24,019,259.71

5. Net profit ("-" for net loss)                 146,808,358.00                            128,564,198.64

   (1) By operating consistency

        1. Net profit from continuous
                                                 146,808,358.00                            128,570,716.39
operation ("-" for net loss)

        2. Net profit from discontinuous
                                                                                                -6,517.75
operation ("-" for net loss)

   (2) By ownership

        1. Net profit attributable to the
                                                 146,839,884.57                            128,581,755.01
owners of parent company

        2. Minor shareholders’ equity               -31,526.57                                -17,556.37

6. After-tax net amount of other misc.
                                                    940,933.00                               1,389,774.33
incomes

   After-tax net amount of other misc.
                                                    940,933.00                               1,389,774.33
incomes attributed to parent's owner

        (1) Other misc. incomes that cannot
                                                    -520,143.59
be re-classified into gain and loss

                1. Re-measure the change in
the defined benefit plan


                                                                                                        57
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             2. Other comprehensive
income that cannot be transferred to
profit or loss under the equity method

             3. Fair value change of
                                                                         -520,143.59
investment in other equity tools

             4. Fair value change of the
company's credit risk

             5. Others

     (2) Other misc. incomes that will be
                                                                        1,461,076.59                                 1,389,774.33
re-classified into gain and loss

             1. Other comprehensive
income that can be transferred to profit or
loss under the equity method

             2. Fair value change of other
debt investment

             3. Gains and losses from
changes in fair value of available-for-sale
financial assets

             4. Other credit investment
credit impairment provisions

             5. Cash flow hedge reserve                                 1,625,577.36                                 1,396,635.00

             6. Translation difference of
                                                                         -164,500.77                                     -6,860.67
foreign exchange statement

             7. Others

  After-tax net of other misc. income
attributed to minority shareholders

7. Total of misc. incomes                                             147,749,291.00                               129,953,972.97

     Total of misc. incomes attributable
                                                                      147,780,817.57                               129,971,529.34
to the owners of the parent company

     Total misc gains attributable to the
                                                                           -31,526.57                                   -17,556.37
minor shareholders

8. Earnings per share:

     (1) Basic earnings per share                                                0.13                                         0.11

     (2) Diluted earnings per share                                              0.13                                         0.11

Net profit contributed by entities merged under common control in the report period was RMB0.00, net profit realized by parties
merged during the previous period is RMB0.00.


Legal representative: Xiong Jianming          CFO: Lin Kebing          Accounting Manager: Wu Bohua



                                                                                                                                  58
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4. Income Statement of the Parent Company

                                                                                                            In RMB

                      Item                      H1 2020                                  H1 2019

1. Turnover                                               12,719,395.10                              17,142,022.88

        Less: Operation cost                                 151,219.77                               3,496,588.06

            Taxes and surcharges                             677,865.78                                 645,703.49

            Sales expense

            Administrative expense                        11,316,043.39                              11,286,569.85

            R&D cost

            Financial expenses                            14,753,727.62                              21,369,380.01

               Including: interest cost                   15,820,677.77                              17,322,986.12

                         Interest income                   1,914,893.50                                 351,128.89

        Add: other gains                                     295,818.89                                 234,066.99

            Investment gains (―-‖ for loss)                338,561.17                               1,155,183.42

            Incl. Investment gains from
affiliates and joint ventures

                 Financial assets
derecognised as a result of amortized
cost ("-" for loss)

            Net open hedge gains (―-‖ for
loss)

            Gains from change of fair
value (―-― for loss)

            Credit impairment ("-" for
                                                               -2,277.86                                  4,732.39
loss)

            Investment impairment loss
("-" for loss)

            Investment gains ("-" for loss)

2. Operational profit (―-‖ for loss)                    -13,547,359.26                            -18,262,235.73

        Plus: non-operational income                          51,867.26                                  13,947.68

        Less: non-operational expenditure                      1,008.00                                 106,388.64

4. Gross profit ("-" for loss)                            -13,496,500.00                            -18,354,676.69

        Less: Income tax expenses                          -3,313,543.54                             -4,545,338.46

4. Net profit (―-‖ for net loss)                        -10,182,956.46                            -13,809,338.23

        (1) Net profit from continuous
                                                          -10,182,956.46                            -13,809,338.23
operation ("-" for net loss)


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                                                    Interim Report 2020 of China Fangda Group Co., Ltd.


       (2) Net profit from discontinuous
operation ("-" for net loss)

5. After-tax net amount of other misc.
incomes

       (1) Other misc. incomes that
cannot be re-classified into gain and
loss

              1. Re-measure the change
in the defined benefit plan

              2. Other comprehensive
income that cannot be transferred to
profit or loss under the equity method

              3. Fair value change of
investment in other equity tools

              4. Fair value change of the
company's credit risk

              5. Others

       (2) Other misc. incomes that will
be re-classified into gain and loss

              1. Other comprehensive
income that can be transferred to profit
or loss under the equity method

              2. Fair value change of
other debt investment

              3. Gains and losses from
changes in fair value of
available-for-sale financial assets

              4. Other credit investment
credit impairment provisions

              5. Cash flow hedge reserve

              6. Translation difference of
foreign exchange statement

            7. Others

6. Total of misc. incomes                    -10,182,956.46                            -13,809,338.23

7. Earnings per share:

       (1) Basic earnings per share

       (2) Diluted earnings per share




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                                                               Interim Report 2020 of China Fangda Group Co., Ltd.


5. Consolidated Cash Flow Statement

                                                                                                          In RMB

                    Item                    H1 2020                                    H1 2019

1. Net cash flow from business
operations:

       Cash received from sales of
                                                      1,148,453,499.83                           1,201,792,721.87
products and providing of services

       Net increase of customer deposits
and capital kept for brother company

       Net increase of loans from central
bank

       Net increase of inter-bank loans
from other financial bodies

       Cash received against original
insurance contract

       Net cash received from reinsurance
business

       Net increase of client deposit and
investment

       Cash received as interest,
processing fee, and commission

       Net increase of inter-bank fund
received

       Net increase of repurchasing
business

       Net cash received from trading
securities

       Tax refunded                                      3,698,239.91                               1,495,878.35

       Other cash received from business
                                                       213,941,117.36                              48,007,747.43
operation

Sub-total of cash inflow from business
                                                      1,366,092,857.10                           1,251,296,347.65
operations

       Cash paid for purchasing products
                                                       993,332,051.36                             977,060,414.15
and services

       Net increase of client trade and
advance

       Net increase of savings in central
bank and brother company


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                                                      Interim Report 2020 of China Fangda Group Co., Ltd.


     Cash paid for original contract
claim

     Net increase in funds dismantled

     Cash paid for interest, processing
fee and commission

     Cash paid for policy dividend

     Cash paid to and for the staff           166,379,960.84                             162,220,114.55

     Taxes paid                                66,683,039.19                             177,525,390.09

     Other cash paid for business
                                              276,683,285.11                             307,215,431.97
activities

Sub-total of cash outflow from business
                                             1,503,078,336.50                          1,624,021,350.76
operations

Cash flow generated by business
                                             -136,985,479.40                            -372,725,003.11
operations, net

2. Cash flow generated by investment:

     Cash received from investment
                                             2,502,405,357.62                          2,093,521,250.01
recovery

     Cash received as investment profit         9,253,861.27                              21,362,317.22

     Net cash retrieved from disposal of
fixed assets, intangible assets, and other                                                13,165,854.60
long-term assets

     Net cash received from disposal of
subsidiaries or other operational units

     Other investment-related cash
                                                      250.00
received

Sub-total of cash inflow generated from
                                             2,511,659,468.89                          2,128,049,421.83
investment

     Cash paid for construction of fixed
assets, intangible assets and other            69,438,943.88                              90,816,069.59
long-term assets

     Cash paid as investment                 2,509,460,000.00                          2,555,019,000.00

     Net increase of loan against pledge

     Net cash paid for acquiring
                                                                                          61,934,830.31
subsidiaries and other operational units

     Other cash paid for investment

Subtotal of cash outflows                    2,578,898,943.88                          2,707,769,899.90

Cash flow generated by investment
                                               -67,239,474.99                           -579,720,478.07
activities, net


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                                                                  Interim Report 2020 of China Fangda Group Co., Ltd.


3. Cash flow generated by financing
activities:

     Cash received from investment

     Incl. Cash received from
investment attracted by subsidiaries
from minority shareholders

     Cash received from borrowed
                                                         2,304,697,876.18                            800,000,000.00
loans

     Other cash received from financing
                                                                                                          39,406.61
activities

Subtotal of cash inflow from financing
                                                         2,304,697,876.18                            800,039,406.61
activities

     Cash paid to repay debts                            1,813,978,153.39                            108,000,000.00

     Cash paid as dividend, profit, or
                                                          119,588,570.23                             275,410,279.99
interests

     Including: dividends and profits
paid by subsidiaries to minority
shareholders

     Other cash paid for financing
                                                          281,298,965.99                              40,000,000.00
activities

Subtotal of cash outflow from financing
                                                         2,214,865,689.61                            423,410,279.99
activities

Net cash flow generated by financing
                                                           89,832,186.57                             376,629,126.62
activities

4. Influence of exchange rate changes
                                                            1,284,254.96                                -229,009.27
on cash and cash equivalents

5. Net increase in cash and cash
                                                          -113,108,512.86                           -576,045,363.83
equivalents

     Plus: Balance of cash and cash
                                                          725,269,902.90                             956,190,890.68
equivalents at the beginning of term

6. Balance of cash and cash equivalents
                                                          612,161,390.04                             380,145,526.85
at the end of the period


6. Cash Flow Statement of the Parent Company

                                                                                                             In RMB

                  Item                         H1 2020                                    H1 2019

1. Net cash flow from business
operations:


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                                                      Interim Report 2020 of China Fangda Group Co., Ltd.


     Cash received from sales of
                                                8,683,073.96                              14,039,967.56
products and providing of services

     Tax refunded                                 232,652.87

     Other cash received from business
                                             2,914,427,921.50                          1,674,530,421.33
operation

Sub-total of cash inflow from business
                                             2,923,343,648.33                          1,688,570,388.89
operations

     Cash paid for purchasing products
                                                  406,441.27                               1,824,577.30
and services

     Cash paid to and for the staff             9,739,820.05                               8,465,407.93

     Taxes paid                                   793,263.98                               1,250,265.96

     Other cash paid for business
                                             2,553,029,078.24                          2,021,264,885.71
activities

Sub-total of cash outflow from business
                                             2,563,968,603.54                          2,032,805,136.90
operations

Cash flow generated by business
                                              359,375,044.79                            -344,234,748.01
operations, net

2. Cash flow generated by investment:

     Cash received from investment
                                              562,800,000.00                             710,000,000.00
recovery

     Cash received as investment profit           338,561.17                               1,155,183.42

     Net cash retrieved from disposal of
fixed assets, intangible assets, and other
long-term assets

     Net cash received from disposal of
subsidiaries or other operational units

     Other investment-related cash
received

Sub-total of cash inflow generated from
                                              563,138,561.17                             711,155,183.42
investment

     Cash paid for construction of fixed
assets, intangible assets and other                48,767.89                                  50,698.00
long-term assets

     Cash paid as investment                  562,800,000.00                             746,000,001.00

     Net cash paid for acquiring
subsidiaries and other operational units

     Other cash paid for investment

Subtotal of cash outflows                     562,848,767.89                             746,050,699.00


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                                                                                        Interim Report 2020 of China Fangda Group Co., Ltd.


Cash flow generated by investment
                                                                                  289,793.28                                        -34,895,515.58
activities, net

3. Cash flow generated by financing
activities:

     Cash received from investment

     Cash received from borrowed
                                                                             500,000,000.00                                        400,000,000.00
loans

     Other cash received from financing
                                                                                                                                         39,406.61
activities

Subtotal of cash inflow from financing
                                                                             500,000,000.00                                        400,039,406.61
activities

     Cash paid to repay debts                                                810,000,000.00

     Cash paid as dividend, profit, or
                                                                              71,233,278.75                                        241,065,709.32
interests

     Other cash paid for financing
                                                                              99,998,965.99
activities

Subtotal of cash outflow from financing
                                                                             981,232,244.74                                        241,065,709.32
activities

Net cash flow generated by financing
                                                                             -481,232,244.74                                       158,973,697.29
activities

4. Influence of exchange rate changes
                                                                                     -78,890.92                                                405.76
on cash and cash equivalents

5. Net increase in cash and cash
                                                                             -121,646,297.59                                       -220,156,160.54
equivalents

     Plus: Balance of cash and cash
                                                                             175,341,953.63                                        281,594,621.80
equivalents at the beginning of term

6. Balance of cash and cash equivalents
                                                                              53,695,656.04                                         61,438,461.26
at the end of the period


7. Statement of Change in Owners’ Equity (Consolidated)

Amount of the Current Term
                                                                                                                                               In RMB

                                                                             H1 2020

                                                Owners' Equity Attributable to the Parent Company
                                                                                                                                               Total
                                                                                                                                    Minor
                             Other equity                   Less:   Other Specia               Comm                                              of
        Item      Share                           Capital                            Surplu              Undist                     shareh
                              instruments                   Shares miscell    l                on risk                    Subtot               owners
                  capita                          reserve                               s                ributed Others             olders’
                                                              in    aneous reserve             provisi                      al                   ’
                           Prefe Perpe Other                                                                                        equity
                    l                                s                               reserve             profit
                                                            stock incom       s                 ons                                            equity
                           rred   tual      s


                                                                                                                                                       65
                                                               Interim Report 2020 of China Fangda Group Co., Ltd.


                              share bond              e

                      1,123
1. Balance at                                                159,80         3,898,         5,182, 48,410 5,231,
                      ,384,                1,454,   -475,4
the end of last                                              5,930.        626,17          795,07 ,009.6 205,08
                      189.0                191.59    09.25
year                                                            34            7.99           9.67       0      9.27
                         0

       Plus:
Changes in
accounting
policies


Correction of
previous errors


Consolidation
of entities under
common control


Others

                      1,123
2. Balance at                                                159,80         3,898,         5,182, 48,410 5,231,
                      ,384,                1,454,   -475,4
the beginning of                                             5,930.        626,17          795,07 ,009.6 205,08
                      189.0                191.59    09.25
current year                                                    34            7.99           9.67       0      9.27
                         0

3. Change
amount       in the   -35,1                                  -64,28        92,425
                                                    940,93                                -6,019, -31,52 -6,050,
current period        05,23                                  0,649.         ,937.0
                                                      3.00                                 017.26    6.57 543.83
(―-― for             8.00                                     28               2
decrease)

                                                                           146,83          147,78            147,74
(1) Total of                                        940,93                                          -31,52
                                                                            9,884.         0,817.            9,291.
misc. incomes                                         3.00                                           6.57
                                                                               57              57               00

(2) Investment
                      -35,1                                  -64,28                        -99,38            -99,38
or decreasing of
                      05,23                                  0,649.                        5,887.            5,887.
capital by
                       8.00                                     28                             28               28
owners

1. Common             -35,1                                  -64,28                        -99,38            -99,38
shares invested       05,23                                  0,649.                        5,887.            5,887.
by owners              8.00                                     28                             28               28

2 Capital
contributed by
other equity
instrument


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                   Interim Report 2020 of China Fangda Group Co., Ltd.


holders

3. Amount of
shares paid and
accounted as
owners' equity

4. Others

                                -54,41         -54,41         -54,41
(3) Profit
                                3,947.         3,947.         3,947.
allotment
                                   55              55             55

1. Provision of
surplus reserves

2 Common risk
provision

3. Distribution                 -54,41         -54,41         -54,41
to owners (or                   3,947.         3,947.         3,947.
shareholders)                      55              55             55

4. Others

(4) Internal
carry-over of
owners' equity

1. Capitalizing
of capital
reserves (or
share capital)

2 Capitalizing
of surplus
reserves (or
share capital)

3. Surplus
reserves used to
cover losses

4. Retained gain
transferred due
to change in set
benefit program

5. Other
miscellaneous
income

6. Others

(5) Special


                                                                   67
                                                                                       Interim Report 2020 of China Fangda Group Co., Ltd.


reserves

1. Provided this
year

2 Used this
period

(6) Others

                   1,088
4. Balance at                                                                        95,525          3,991,        5,176, 48,378 5,225,
                    ,278,                      1,454,             465,52
the end of this                                                                      ,281.0          052,11        776,06 ,483.0 154,54
                   951.0                       191.59               3.75
period                                                                                       6         5.01          2.41         3      5.44
                        0

Amount of the Previous Term
                                                                                                                                       In RMB

                                                                             H1 2019

                                           Owners' Equity Attributable to the Parent Company

                            Other equity                         Other                                                    Minor
                                                        Less:              Specia            Comm                                     Total of
       Item                 instruments                                                                                   shareho
                   Share                      Capital            miscell            Surplu          Undist
                                                    Shares           l            on risk                Subtot         owners’
                   capita Prefe Perp        reserve        aneous            s            ributed Others        lders’
                                                       in         reserve         provisi                  al            equity
                                      Other                                                                     equity
                     l     rred etual          s           incom          reserve          profit
                                        s            stock           s              ons
                          share bond                          e

                   1,155
1. Balance at                                           10,831                      120,47          3,921,       5,195,               5,195,1
                   ,481,                       1,454,            7,382,
the end of last                                         ,437.6                      5,221.          225,87       187,62               87,621.
                   686.0                      191.59             087.59
year                                                        6                           40            2.96         1.88                    88
                       0

       Plus:
                                                                                                    16,171       11,529
Changes in                                                       -5,166,            524,86                                            11,529,
                                                                                                    ,320.5       ,755.0
accounting                                                       425.58               0.03                                             755.03
                                                                                                         8            3
policies


Correction of
previous errors


Consolidation
of entities
under common
control


Others

2. Balance at      1,155                                10,831                      121,00          3,937,       5,206,               5,206,7
                                               1,454,            2,215,
the beginning      ,481,                                ,437.6                      0,081.          397,19       717,37               17,376.
                                              191.59             662.01
of current year    686.0                                    6                           43            3.54         6.91                    91


                                                                                                                                             68
                                                 Interim Report 2020 of China Fangda Group Co., Ltd.


                       0

3. Change
amount       in the -32,0   -10,83            -66,95        -96,09         -182,9             -132,58
                                     1,389,                                         50,345,
current period     97,49    1,437.            7,886.         5,082.        29,254             3,720.6
                                     774.33                                         533.53
(―-― for          7.00       66                36             78            .15                  2
decrease)

                                                            128,58         129,97
(1) Total of                         1,389,                                         -17,556 129,953
                                                             1,755.        1,529.
misc. incomes                        774.33                                             .37 ,972.97
                                                                01             34

(2) Investment
                    -32,0   -10,83            -66,95                       -88,22
or decreasing                                                                       50,363, -37,860
                   97,49    1,437.            7,886.                       3,945.
of capital by                                                                       089.90 ,855.80
                    7.00       66                36                            70
owners

1. Common           -32,0   -10,83            -66,95                       -88,22
                                                                                    50,363, -37,860
shares invested 97,49       1,437.            7,886.                       3,945.
                                                                                    089.90 ,855.80
by owners           7.00       66                36                            70

2 Capital
contributed by
other equity
instrument
holders

3. Amount of
shares paid and
accounted as
owners' equity

4. Others

                                                            -224,6         -224,6             -224,67
(3) Profit
                                                            76,837         76,837             6,837.7
allotment
                                                                .79           .79                  9

1. Provision of
surplus reserves

2 Common risk
provision

3. Distribution                                             -224,6         -224,6             -224,67
to owners (or                                               76,837         76,837             6,837.7
shareholders)                                                   .79           .79                  9

4. Others

(4) Internal
carry-over of
owners' equity



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1. Capitalizing
of capital
reserves (or
share capital)

2 Capitalizing
of surplus
reserves (or
share capital)

3. Surplus
reserves used to
cover losses

4. Retained
gain transferred
due to change
in set benefit
program

5. Other
miscellaneous
income

6. Others

(5) Special
reserves

1. Provided this
year

2 Used this
period

(6) Others

                   1,123
4. Balance at                                                                54,042               3,841,         5,023,                 5,074,1
                   ,384,                     1,454,          3,605,                                                          50,345,
the end of this                                                               ,195.0              302,11         788,12                 33,656.
                   189.0                    191.59          436.34                                                           533.53
period                                                                              7               0.76              2.76                  29
                      0


8. Statement of Change in Owners’ Equity (Parent Company)

Amount of the Current Term
                                                                                                                                        In RMB

                                                                          H1 2020

                                  Other equity                    Less:     Other                            Undistr               Total of
       Item         Share                             Capital                           Special    Surplus
                                   instruments                   Shares in miscella                          ibuted     Others     owners’
                    capital                           reserves                          reserves reserve
                              Preferr Perpet Others               stock     neous                            profit                    equity



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                                 ed     ual                      income
                                share   bond

                      1,123,3                                                                 1,236,0
1. Balance at the                              360,835.          1,287,62         159,805,                   2,520,841,
                      84,189.                                                                 02,518.
end of last year                                    52               9.38           930.34                       103.03
                          00                                                                      79

      Plus:
Changes in
                                                                                                                   0.00
accounting
policies


Correction of                                                                                                      0.00
previous errors

             Others                                                                                                0.00

2. Balance at the 1,123,3                                                                     1,236,0
                                               360,835.          1,287,62         159,805,                   2,520,841,
beginning of          84,189.                             0.00                                02,518.
                                                    52               9.38           930.34                       103.03
current year              00                                                                      79

3. Change
amount       in the
                      -35,105                                                      -64,280, -64,596          -163,982,7
current period
                      ,238.00                                                       649.28 ,904.01                91.29
(―-― for
decrease)

(1) Total of misc.                                                                            -10,182        -10,182,95
incomes                                                                                       ,956.46              6.46

(2) Investment or
decreasing of         -35,105                                                      -64,280,                  -99,385,88
capital by            ,238.00                                                       649.28                         7.28
owners

1. Common
                      -35,105                                                      -64,280,                  -99,385,88
shares invested
                      ,238.00                                                       649.28                         7.28
by owners

2 Capital
contributed by
other equity                                                                                                       0.00
instrument
holders

3. Amount of
shares paid and
                                                                                                                   0.00
accounted as
owners' equity

4. Others                                                                                                          0.00



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(3) Profit                                                            -54,413         -54,413,94
allotment                                                             ,947.55               7.55

1. Provision of
                                                                                            0.00
surplus reserves

2 Distribution to
                                                                      -54,413         -54,413,94
owners (or
                                                                      ,947.55               7.55
shareholders)

3. Others                                                                                   0.00

(4) Internal
carry-over of                                                                               0.00
owners' equity

1. Capitalizing
of capital
                                                                                            0.00
reserves (or
share capital)

2 Capitalizing of
surplus reserves                                                                            0.00
(or share capital)

3. Surplus
reserves used to                                                                            0.00
cover losses

4. Retained gain
transferred due
                                                                                            0.00
to change in set
benefit program

5. Other
miscellaneous                                                                               0.00
income

6. Others                                                                                   0.00

(5) Special
                                                                                            0.00
reserves

1. Provided this
                                                                                            0.00
year

2 Used this
                                                                                            0.00
period

(6) Others                                                                                  0.00

4. Balance at the 1,088,2                                             1,171,4
                               360,835.   1,287,62         95,525,2                   2,356,858,
end of this          78,951.                                          05,614.
                                    52        9.38            81.06                       311.74
period                   00                                               78

Amount of the Previous Term

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                                                                                                                                     In RMB

                                                                              H1 2019

                                    Other equity
                                                                              Other
                                    instruments                    Less:                                    Undistrib             Total of
       Item         Share                              Capital               miscella Special    Surplus
                             Preferr Perpet                       Shares                                      uted      Others    owners’
                   capital                             reserves               neous     reserves reserve
                               ed       ual   Others              in stock                                   profit                equity
                                                                             income
                             share     bond

1. Balance at       1,155,
                                                       360,835 10,831,4 8,756,5                  120,475 504,081,9               1,778,324,8
the end of last    481,68
                                                            .52     37.66      53.46             ,221.40        99.00                 57.72
year                  6.00

       Plus:
Changes in                                                                   -5,166,4            524,860 4,723,740
                                                                                                                                  82,174.65
accounting                                                                     25.58                 .03          .20
policies


Correction of
previous errors


Others

2. Balance at       1,155,
                                                       360,835 10,831,4 3,590,1                  121,000 508,805,7               1,778,407,0
the beginning      481,68
                                                            .52     37.66      27.88             ,081.43        39.20                 32.37
of current year       6.00

3. Change
amount       in the -32,09
                                                                  -10,831,                       -66,957, -238,486,              -326,710,12
current period      7,497.
                                                                   437.66                         886.36      176.03                    1.73
(―-― for             00
decrease)

(1) Total of                                                                                                -13,809,3            -13,809,338
misc. incomes                                                                                                   38.23                    .23

(2) Investment
                    -32,09
or decreasing of                                                  -10,831,                       -66,957,                        -88,223,945
                    7,497.
capital by                                                         437.66                         886.36                                 .70
                       00
owners

1. Common           -32,09
                                                                  -10,831,                       -66,957,                        -88,223,945
shares invested     7,497.
                                                                   437.66                         886.36                                 .70
by owners              00

2 Capital
contributed by
other equity
instrument



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                   Interim Report 2020 of China Fangda Group Co., Ltd.


holders

3. Amount of
shares paid and
accounted as
owners' equity

4. Others

(3) Profit                           -224,676,           -224,676,83
allotment                              837.80                   7.80

1. Provision of
surplus reserves

2 Distribution
                                     -224,676,           -224,676,83
to owners (or
                                       837.80                   7.80
shareholders)

3. Others

(4) Internal
carry-over of
owners' equity

1. Capitalizing
of capital
reserves (or
share capital)

2 Capitalizing
of surplus
reserves (or
share capital)

3. Surplus
reserves used to
cover losses

4. Retained gain
transferred due
to change in set
benefit program

5. Other
miscellaneous
income

6. Others

(5) Special
reserves

1. Provided this
year


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2 Used this
period

(6) Others

4. Balance at     1,123,
                                                  360,835            3,590,1             54,042, 270,319,5             1,451,696,9
the end of this   384,18
                                                       .52             27.88              195.07      63.17                  10.64
period              9.00


III. General Information

      1. LITITONG's Profile

      China Fangda Group Co., Ltd. (hereinafter referred to as "the Company") was approved in October 1995 by the General Office
of the Shenzhen Municipal People's Government with the letter of Shenfu Office (1995) No. 194, in the original "Shenzhen Fangda
Building Materials Co., Ltd." on the basis of the establishment of the fundraising method. The unified social credit code is:
91440300192448589C; registered address:        Fangda Technology Building, Keji South 12th Road, South District, High-tech
Industrial Park, Nanshan District, Shenzhen. Mr. Xiong Jianming is the legal representative.

      The Company issued foreign currency shares (B shares) and local currency shares (A shares) and listed in November 1995 and
April 1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance of Fangda
China Group Co., Ltd. (CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of 32,184,931 A-shares
in June 20116. According to the 2016 Annual Profit Allocation Scheme, which was approved by the 2016 Annual Shareholders'
Congress, the Company has a total share capital of 789, 094, 836 shares as the basis and a capital reserve fund of 5 shares per 10
shares to all shareholders. The registered capital at the end of 2017 was RMB1,183,642,254.00. In August 2018, the Company
repurchased and cancelled 28,160,568 B-shares. In January 2019, the company repurchased and cancelled 32,097,497 B-shares. The
company repurchased and cancelled in May 2020, and cancelled 35,105,238 B shares, and the existing registered capital is
RMB1,088,278,951.00.

      The Company has established a corporate governance structure that comprises shareholders’ meeting, board of directors and
supervisory committee. Currently, the Company sets up the President Office, Administrative Department, HR Department, Enterprise
Management Department, Financial Department, Audit and Supervisory Department, Securities Department, Technology Innovation
Department and IT Department and has established subsidiaries including Fangda Decoration, Fangda Chuangzhi, Fangda New
Material, Fangda Property and Fangda New Energy.

      The business nature and main business operations of the Company and subsidiaries (―the Group‖) include (1) production and
sales of curtain wall materials, design, production and installation of construction curtain walls; (2) assembly and production of
subway screen doors; (3) development and operation of real estate projects on land, of which rights have been obtained lawfully; (4)
R&D, installation and sales of PV devices, design and installation of PV power plants.

      2. Consolidation Scope and Change

      This part of the simplified disclosure is as follows: The company in the current period includes a total of 24 subsidiaries, of
which 1 have been added this year and 2 have been reduced this year. For details, please refer to "Note 6. Change of the scope of
merger" and "Note 9. Rights and Interests in Other Subjects".




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IV. Basis for the preparation of financial statements

1. Preparation basis

      The company prepares the financial statements based on continuous operation and according to actual transactions and events,
with figures confirmed and measured in compliance with the Accounting Standards for Business Enterprises and other specific
account standards, application guide and interpretations. The Company has also disclosed related financial information according to
the requirement of the Regulations of Information Disclosure No.15 – General Provisions for Financial Statements (Revised in 2014)
issued by the CSRC.


2. Continuous operation

      The Company assessed the continuing operations capability of the Company for the 12 months from the end of the reporting
period. No matters were found that would affect the Company's ability to continue as a going concern. It is reasonable for the
Company to prepare financial statements based on continuing operations.


V. Significant Account Policies and Estimates

Specific accounting policy and estimate prompt:

The following major accounting policies and accounting estimates shall be formulated in accordance with the accounting standards
of the enterprise. Unmentioned operations are carried out in accordance with the relevant accounting policies in the enterprise
accounting standards.


1. Statement of compliance to the Enterprise Accounting Standard

      These financial statements meet the requirements of the Accounting Standards for Business Enterprises and truly and fully
reflect the Company’s financial status, performance result, changes in shareholders’ equity and cash flows.


2. Fiscal Period

      The company's fiscal year starts on January 1 and ends on December 31 of the Gregorian calendar.


3. Operation period

      Our normal business cycle is one year


4. Bookkeeping standard money

      The company's bookkeeping standard currency is Renminbi, and overseas subsidiaries are based on the currency of the main
economic environment in which they operate.


5. Accounting treatment of the entities under common and different control

      (1) Consolidation of entities under common control



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       The assets and liabilities acquired by the company in a business combination are measured at the book value of the combined
party in the consolidated financial statements of the ultimate controlling party on the date of combination. Among them, if the
accounting policy adopted by the merger party is different from that adopted by the company before the merger, the accounting
policy is unified based on the principle of importance, that is, the book value of the assets and liabilities of the merger party is
adjusted according to the accounting policy of the company. If there is a difference between the book value of the net assets acquired
by the company in the business combination and the book value of the consideration paid, first adjust the balance of the capital
reserve (capital premium or equity premium), the balance of the capital reserve (capital premium or equity premium) If it is
insufficient to offset, the surplus reserve and undistributed profits will be offset in sequence.

       The accounting treatment method of enterprise merger under the same control through step-by-step transaction is described in
Section 5 and 6 (5).

       (2) Consolidation of entities under different control

       All identifiable assets and liabilities acquired by the Company during the merger shall be measured at its fair value on the date
of purchase. Among them, if the accounting policy adopted by the merger party is different from that adopted by the company before
the merger, the accounting policy is unified based on the principle of importance, that is, the book value of the assets and liabilities of
the merger party is adjusted according to the accounting policy of the company. The merger cost of the company on the date of
purchase is greater than the fair value of the assets and liabilities recognized by the purchaser in the merger, and is recognized as
goodwill. If the merger cost is less than the difference between the identifiable assets and the fair value of the liabilities obtained by
the purchaser in the enterprise merger, the merger cost and the fair value of the identifiable assets and the liabilities obtained by the
purchaser in the enterprise merger are reviewed, and the merger cost is still less than the fair value of the identifiable assets and
liabilities obtained by the purchaser after the review, the difference is considered as the profit and loss of the current period of the
merger.

       See V, 6 (5) for the accounting treatment method of business combination under the same control through step-by-step
transaction.

       (3) Treatment of related transaction fee in enterprise merger

       Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal services occurred relating
to the merger of entities are accounted into current income account when occurred. The transaction fees of equity certificates or
liability certificates issued by the purchaser for payment for the acquisition are accounted at the initial amount of the certificates.


6. Preparation of Consolidated Financial Statements

       (1) Determination of consolidation scope

       The consolidated scope of the consolidated financial statements is determined on a control basis and includes not only
subsidiaries determined on the basis of voting rights (or similar voting rights) themselves or in conjunction with other arrangements,
but also structured subjects determined on the basis of one or more contractual arrangements.

       Control means the power possessed by the Company on invested entities to share variable returns by participating in related
activities of the invested entities and to impact the amount of the returns by using the power. The subsidiary company is the subject
controlled by the company (including the enterprise, the divisible part of the invested unit and the structured subject controlled by the
enterprise, etc.). The structured subject is the subject which is not designed to determine the controlling party by taking the voting
right or similar right as the decisive factor.

       (2) Preparation of Consolidated Financial Statements

       The company prepares consolidated financial statements based on the financial statements of itself and its subsidiaries and

                                                                                                                                          77
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based on other relevant information.

       The company compiles consolidated financial statements, regards the whole enterprise group as an accounting entity, reflects
the overall financial status, operating results and cash flow of the enterprise group according to the confirmation, measurement and
presentation requirements of the relevant enterprise accounting standards, and the unified accounting policy and accounting period.

       ① Merge the assets, liabilities, owner's rights and interests, income, expenses and cash flow of parent company and
subsidiary company.

       ② Offset the long-term equity investment of the parent company to the subsidiary company and the share of the parent
company in the ownership rights of the subsidiary company.

       ③ Offset the influence of internal transaction between parent company, subsidiary company and subsidiary company. Where
an internal transaction indicates a loss of impairment of the relevant assets, the loss shall be fully recognized.

       ④ Adjust the special transaction from the angle of enterprise group.

       (3) Processing of subsidiaries during the reporting period

     ① Increase of subsidiaries or business

     A. Subsidiary or business increased by business combination under the same control

     (a) When preparing the consolidated balance sheet, adjust the opening number of the consolidated balance sheet and adjust the
related items of the comparative statement. The same report entity as the consolidated balance sheet will exist from the time of the
final control party.

     (b) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combination from
the beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement, and the
related items of the comparative statement are adjusted, which is regarded as the combined report body since the final The controller
has been there since the beginning of control.

     (c) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combination from the
beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement, and the related
items of the comparative statement are adjusted, which is regarded as the combined report body since the final The controller has
been there since the beginning of control.

     B. Subsidiaries or businesses added by business combinations not under the same control

     (a) When preparing the consolidated balance sheet, the opening number of the consolidated balance sheet is not adjusted.

     (b) When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and the business
Purchase date and Closing balance shall be included in the consolidated profit statement.

     (c) When the consolidated cash flow statement is prepared, the cash flow from the purchase date of the subsidiary to the end of
the reporting period is included in the consolidated cash flow statement.

     ② Disposal of subsidiaries or business

     (A) When preparing the consolidated balance sheet, the opening number of the consolidated balance sheet is not adjusted.

     B. When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and the business
opening and disposal date shall be included in the consolidated profit statement.

     C. When the consolidated cash flow statement is prepared, the cash flow from the Beginning of the period of the subsidiary to
the end of the reporting period is included in the consolidated cash flow statement.


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     (4) Special considerations in consolidation offsets

     ① The long-term equity investment held by a subsidiary company shall be regarded as the inventory shares of the company as a
subtraction of the owner's rights and interests, which shall be listed under the item of "subtraction: Stock shares" under the item of
owner's rights and interests in the consolidated balance sheet.

     The long-term equity investments held by the subsidiaries are offset by the shares of the shareholders of the subsidiaries.

     ② The "special reserve" and "general risk preparation" projects, because they are neither real capital (or share capital) nor
capital reserve, but also different from the retained income and undistributed profits, are restored according to the ownership of the
parent company after the long-term equity investment is offset by the ownership rights and interests of the subsidiary company.

     ③ If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and the
taxable basis of the taxpayer due to the offset of the unrealized internal sales gain or loss, the deferred income tax asset or the
deferred income tax liability is confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profit
statement is adjusted, with the exception of the deferred income tax related to the transaction or event directly included in the owner's
equity and the merger of the enterprise.

     ④ The unrealized internal transaction gains and losses incurred by the company from selling assets to subsidiaries shall be fully
offset against the "net profit attributable to the owners of the parent company". The unrealized internal transaction gains and losses
arising from the sale of assets by the subsidiary to the company shall be offset between the ―net profit attributable to the owners of
the parent company‖ and the ―minority shareholder gains and losses‖ in accordance with the company’s distribution ratio to the
subsidiary. The unrealized internal transaction gains and losses arising from the sale of assets between subsidiaries shall be offset
between the "net profit attributable to the owners of the parent company" and the "minority shareholders' gains and losses" in
accordance with the company's distribution ratio to the seller's subsidiary .

     ⑤ If the current loss shared by the minority shareholders of the subsidiary exceeds the share of the minority shareholders in the
owner ’s equity of the subsidiary at the beginning of the period, the balance should still be offset against the minority
shareholders ’equity.

     (5) Accounting treatment of special transactions

     ① Purchase minority shareholders' equity

     The Company purchases the shares of the subsidiaries owned by the minority shareholders of the subsidiaries. In the individual
financial statements, the investment costs of the newly acquired long-term investments of the minority shares shall be measured at
the fair value of the price paid. In the consolidated financial statements, the difference between the newly acquired long-term equity
investment due to the purchase of minority equity and the share of net assets that should be continuously calculated by the subsidiary
since the purchase date or the merger date should be adjusted according to the new shareholding ratio. The product (capital premium
or equity premium), if the capital reserve is insufficient to offset, the surplus reserve and undistributed profits are offset in turn.

     ② Step-by-step acquisition of control of the subsidiary through multiple transactions

     A. Enterprise merger under common control through multiple transactions

     On the date of the merger, the company determines the initial investment cost of the long-term equity investment in the
individual financial statements based on the share of the subsidiary ’s net assets that should be enjoyed after the merger in the final
controller ’s consolidated financial statements; the initial investment cost and the The difference between the book value of the
long-term equity investment before the merger plus the book value of the consideration paid for new shares acquired on the merger
date, the capital reserve (capital premium or equity premium) is adjusted, and the capital reserve (capital premium or equity premium)
is insufficient to offset Reduced, in turn offset the surplus reserve and undistributed profits.



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     In consolidated financial statements, assets and liabilities obtained by the merging party from the merged party should be
measured at the book value in the final controlling party’s consolidated financial statements other than the adjustment made due to
differences in accounting policies; adjust the capital surplus (share premium) according to the difference between the initial
investment cost and the book value of the held investment before merger plus the book value of the consideration paid on the merger
date. Where the capital surplus falls short, the retained income should be adjusted.

     If the merging party holds the equity investment before acquiring the control of the merged party and is accounted for according
to the equity method, the date of acquiring the original equity and the merging party and the merged party are in the same party's final
control from the later date to the merger date The relevant gains and losses, other comprehensive income and other changes in
owner's equity have been confirmed between them, and the retained earnings at the beginning of the comparative statement period
should be offset separately.

     B. Enterprise merger not under common control through multiple transactions

     On the merger day, in individual financial statements, the initial investment cost of the long-term equity investment on the
merger day is based on the book value of the long-term equity investment previously held plus the sum of the additional investment
costs on the merger day.

     In the consolidated financial statements, the equity of the purchaser held prior to the date of purchase is revalued according to
the fair value of the equity at the date of purchase, and the difference between the fair value and its book value is credited to the
current investment income; If the shares held by the purchaser prior to the date of purchase involve other consolidated gains under
the equity law accounting, the other consolidated gains related thereto shall be converted to the current gains on the date of purchase,
with the exception of the other consolidated gains arising from the remeasurement of the net assets or net liabilities of the merged
party. The company disclosed in the notes the fair value of the equity of the purchased party held before the purchase date and the
amount of related gains or losses remeasured according to the fair value.

     (3) The Company disposes of long-term equity investment in subsidiaries without losing control

     The parent company partially disposes of the long-term equity investment in the subsidiary company without losing control. In
the consolidated financial statements, the disposal price corresponds to the disposal of the long-term equity investment. The
difference between the shares is adjusted for the capital reserve (capital premium or equity premium). If the capital reserve is
insufficient to offset, the retained earnings are adjusted.

     ④ The company disposes of long-term equity investment in subsidiaries and loses control

     A. One transaction disposition

     If the Company loses control over the Invested Party due to the disposal of part of the equity investment, it shall remeasure the
remaining equity according to its fair value at the date of loss of control when compiling the consolidated financial statement. The
sum of the consideration obtained from the disposal of equity and the fair value of the remaining equity minus the difference between
the share of the original subsidiary 's net assets that should be continuously calculated from the purchase date or the merger date,
calculated as the loss of control The investment income of the current period.

     Other comprehensive income and other owner's equity changes related to the equity investment of the atomic company are
transferred to the current profit and loss when the control is lost, except for other comprehensive income arising from the
remeasurement of the net benefits or net assets of the defined benefit plan by the investee. .

     B. Multi-transaction step-by-step disposition

     In consolidated financial statements, you should first determine whether a step-by-step transaction is a "blanket transaction".

     If the step-by-step transaction does not belong to a "package deal", in the individual financial statements, for each transaction



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before the loss of control of the subsidiary, the book value of the long-term equity investment corresponding to each disposal of
equity is carried forward, the price received and the disposal The difference between the book value of the long-term equity
investment is included in the current investment income; in the consolidated financial statements, it should be handled in accordance
with the relevant provisions of "the parent company disposes of the long-term equity investment in the subsidiary without losing
control."

     If a step-by-step transaction belongs to a "blanket transaction", the transaction shall be treated as a transaction that disposes of
the subsidiary and loses control; In individual financial statements, the difference between each disposal price before the loss of
control and the book value of the long-term equity investment corresponding to the equity being disposed of is first recognized as
other consolidated gains and then converted to the current loss of control at the time of the loss of control; In the consolidated
financial statements, for each transaction prior to the loss of control, the difference between the disposition of the price and the
disposition of the investment corresponding to the share in the net assets of the subsidiary shall be recognized as other consolidated
gains and shall, at the time of the loss of control, be transferred to the loss of control for the current period.

     Where the terms, conditions, and economic impact of each transaction meet one or more of the following conditions, usually
multiple transactions are treated as a "package deal":

     (a) These transactions were concluded at the same time or in consideration of mutual influence.

     (b) These transactions can only achieve the business result as a whole;

     (c) The effectiveness of one transaction depends the occurance of at least another transaction;

     (d) A single transaction is not economic and is economic when considered together with other transactions.

     (5) Proportion of minority shareholders in factor companies who increase capital and dilute ownership of parent companies

     Proportion of Others ( minority shareholders in factor companies who increase capital , dilute Subsidiaries of parent companies.
In the consolidated financial statements, the share of the parent company in the net book assets of the former subsidiary of the capital
increase is calculated according to the share ratio of the parent company before the capital increase, the difference between the share
and the net book assets of the latter subsidiary after the capital increase is calculated according to the share ratio of the parent
company, the capital reserve (capital premium or capital premium), the capital reserve (capital premium or capital premium) is not
offset, and the retained income is adjusted.


7. Recognition of cash and cash equivalents

      Cash refers to cash in stock and deposits that can be used for payment at any time. Cash equivalents refer to investments with a
short holding period (generally referring to expiry within three months from the date of purchase), strong liquidity, easy to convert to
a known amount of cash, and little risk of value change.


8.Foreign exchange business and foreign exchange statement translation

      (1) Methods for determining conversion rates in foreign currency transactions

      When the company's foreign currency transactions are initially confirmed, they will be converted into the bookkeeping
standard currency at the spot exchange rate on the transaction date.

      (2) Methods of conversion of foreign currency currency currency items on balance sheet days

      At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheet date. The
exchange differences caused by the difference in exchange rates on the balance sheet date and initial recognizing date or previous


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balance sheet date are included in the current profits and losses. Non-monetary items accounted in foreign currency and on historical
costs are exchanged with the spot exchange rate on the transaction date. Non-monetary items accounted in foreign currency and on
fair value are exchanged with the spot exchange rate on the determination date of the fair value. The exchange difference between the
accounting standard-currency amount and the original accounting standard-currency amount are included in the current profits and
losses.

      (3) Foreign currency statement conversion method

      Prior to the conversion of the financial statements of an enterprise's overseas operations, the accounting period and policy of
the overseas operations should be adjusted to conform to the accounting period and policy of the enterprise. The financial statements
of the corresponding currency (other than the functional currency) should be prepared according to the adjusted accounting policy
and the accounting period. The financial statements of the overseas operations should be converted according to the following
methods:

      ① The assets and liabilities items in the balance sheet are translated at the spot exchange rate on the balance sheet date. Except
for the "undistributed profits" items, the owner's equity items are translated at the spot exchange rate when they occur.

      ② The income and expense items in the profit statement are converted at the spot exchange rate on the transaction date or the
approximate exchange rate of the spot exchange rate.

      ③ The foreign currency cash flow and the foreign subsidiary's cash flow are converted using the immediate exchange rate or
the approximate exchange rate at the date of the cash flow. The impact of exchange rate changes on cash should be used as an
adjustment item and presented separately in the cash flow statement.

      ④ During the preparation of the consolidated financial statements, the resulting foreign currency financial statement
conversion variance is presented separately under the owner's equity item in the consolidated balance sheet.
      When foreign operations are disposed of and the control rights are lost, the difference in foreign currency statements related to
the overseas operations that are listed in the shareholders' equity items in the balance sheet is transferred to the profit or loss for the
current period, either in whole or in proportion to the disposal of the foreign operations.


9. Financial instrument

      Financial instrument refers to a company’s financial assets and contracts that form other units of financial liabilities or equity
instruments.

      (1) Recognition and de-recognition of financial instrument

      The Company recognizes a financial asset or liability when it becomes one party in the financial instrument contract.

      Financial asset is derecognized when:

      ① The contractual right to receive the cash flows of the financial assets is terminated;

      ② The financial asset is transferred and meets the following derecognition condition.

      If the current obligation of a financial liability (or part of it) has been discharged, the company derecognises the financial
liability (or part of the financial liability). When the Company (borrower) and lender enter into an agreement to replace the original
financial liabilities by undertaking new financial liabilities and the contract terms for the new financial liabilities are essentially
different from those for the original one, the original financial liabilities will be derecognized and new financial liabilities will be
recognized. Where the Company makes substantial amendments to the contract terms of the original financial liability (or part
thereof), it shall terminate the original financial liability and confirm a new financial liability in accordance with the amended terms.



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      Financial asset transactions in regular ways are recognized and de-recognized on the transaction date. The conventional sale of
financial assets means the delivery of financial assets in accordance with the contractual terms and conditions, at the time set out in
the regulations or market practices. Transaction date refers to the date when the company promises to buy or sell financial assets.

      (2) Classification and subsequent measurement of financial assets

      At initial recognition, the Company classifies financial assets into the following three categories based on the business model
of managing financial assets and the contractual cash flow characteristics of financial assets: financial assets measured at amortized
cost are measured at fair value and their changes are included in other financial assets with current profit and loss and financial assets
measured at fair value through profit or loss. Unless the Company changes the business model for managing financial assets, in this
case, all affected financial assets are reclassified on the first day of the first reporting period after the business model changes,
otherwise the financial assets may not be initially confirmed.

      Financial assets are measured at the fair value at the initial recognition. For financial assets measured at fair value with
variations accounted into current income account, related transaction expenses are accounted into the current income. For other
financial assets, the related transaction expenses are accounted into the initial recognized amounts. Bills receivable and accounts
receivable arising from the sale of commodities or the provision of labor services that do not contain or do not consider significant
financing components, the company performs initial measurement according to the transaction price defined by the income standard.

      The subsequent measurement of financial assets depends on their classification:

      ① Financial assets measured at amortized cost

      Financial assets that meet the following conditions at the same time are classified as financial assets measured at amortized cost:
The company ’s business model for managing this financial asset is to collect contractual cash flows as its goal; the contract terms of
the financial asset stipulate that Cash flow is only the payment of principal and interest based on the outstanding principal amount.
For such financial assets, the actual interest rate method is used for subsequent measurement according to the amortized cost. The
gains or losses arising from the termination of recognition, amortization or impairment based on the actual interest rate method are
included in the current profit and loss.

      ② Financial assets measured at fair value and whose changes are included in other comprehensive income

      Financial assets that meet the following conditions at the same time are classified as financial assets measured at fair value and
their changes are included in other comprehensive income: The company's business model for managing this financial asset is to both
target the collection of contractual cash flows and the sale of financial assets. Objective; The contractual terms of the financial asset
stipulate that the cash flow generated on a specific date is only for the payment of principal and interest based on the outstanding
principal amount. For such financial assets, fair value is used for subsequent measurement. Except for impairment losses or gains and
exchange gains and losses recognized as current gains and losses, changes in the fair value of such financial assets are recognized as
other comprehensive income. Until the financial asset is derecognized, its accumulated gains or losses are transferred to current gains
and losses. However, the relevant interest income of the financial asset calculated by the actual interest rate method is included in the
current profit and loss.

      The Company irrevocably chooses to designate a portion of non-tradable equity instrument investment as a financial asset
measured at fair value and whose variation is included in other consolidated income. Only the relevant dividend income is included
in the current profit and loss, and the variation of fair value is recognized as other consolidated income.

      ③ Financial assets measured at fair value with variations accounted into current income account

      The above financial assets measured at amortized cost and other financial assets measured at fair value and whose changes are
included in other comprehensive income are classified as financial assets measured at fair value and whose changes are included in
the current profit and loss. For such financial assets, fair value is used for subsequent measurement, and all changes in fair value are


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included in current profit and loss.

      (3) Classification and measurement of financial liabilities

      The company classifies financial liabilities into financial liabilities measured at fair value and their changes included in the
current profit and loss, loan commitments and financial guarantee contract liabilities for loans below market interest rates, and
financial liabilities measured at amortized cost.

      The subsequent measurement of financial liabilities depends on their classification:

      ① Financial liabilities measured at fair value with variations accounted into current income account

      Such financial liabilities include transactional financial liabilities (including derivatives that are financial liabilities) and
financial liabilities designated as at fair value through profit or loss. After the initial recognition, the financial liabilities are
subsequently measured at fair value. Except for the hedge accounting, the gains or losses (including interest expenses) are recognized
in profit or loss. However, for the financial liabilities designated as fair value and whose variations are included in the profits and
losses of the current period, the variable amount of the fair value of the financial liability due to the variation of credit risk of the
financial liability shall be included in the other consolidated income. When the financial liability is terminated, the cumulative gains
and losses previously included in the other consolidated income shall be transferred out of the other consolidated income and shall be
included in the retained income.

      ② Loan commitments and financial security contractual liabilities

      A loan commitment is a promise that the company provides to customers to issue loans to customers with established contract
terms within the commitment period. Loan commitments are provided for impairment losses based on the expected credit loss model.

      A financial guarantee contract refers to a contract that requires the company to pay a specific amount of compensation to the
contract holder who suffered a loss when a specific debtor is unable to repay the debt in accordance with the original or modified
debt instrument terms. Financial guarantee contract liabilities are subsequently measured based on the higher of the loss reserve
amount determined in accordance with the principle of impairment of financial instruments and the initial recognition amount after
deducting the accumulated amortization amount determined in accordance with the revenue recognition principle.

      ③ Financial liabilities measured at amortized cost

      After initial recognition, other financial liabilities are measured at amortized cost using the effective interest method.

      Except in special circumstances, financial liabilities and equity instruments are distinguished according to the following
principles:

      ① If the company cannot unconditionally avoid delivering cash or other financial assets to fulfill a contractual obligation, the
contractual obligation meets the definition of financial liability. While some financial instruments do not explicitly contain terms and
conditions for the delivery of cash or other financial assets, they may indirectly form contractual obligations through other terms and
conditions.

      If a financial instrument is required to be settled with or can be settled with the Company's own equity instruments, the
Company's own equity instrument used to settle the instrument needs to be considered as a substitute for cash or other financial assets
or for the holder of the instrument to enjoy the remaining equity in the assets after all liabilities are deducted. If it is the former, the
instrument is the financial liabilities of the issuer; if it is the latter, the instrument is the equity instrument of the issuer. In some cases,
a financial instrument contract provides that the Company shall or may use its own instrument of interest, in which the amount of a
contractual right or obligation is equal to the amount of the instrument of its own interest which may be acquired or delivered
multiplied by its fair value at the time of settlement, whether the amount of the contractual right or obligation is fixed or is based
entirely or in part on a variation of a variable other than the market price of the instrument of its own interest, such as the rate of



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interest, the price of a commodity or the price of a financial instrument, the contract is classified as a financial liability.

      (4) Derivative financial instruments and embedded derivatives

      Derivative financial instruments are initially measured at the fair value of the day when the derivative transaction contract is
signed, and are subsequently measured at their fair values. Derivative financial instruments with a positive fair value are recognized
as asset, and instruments with a negative fair value are recognized as liabilities.

      The gains and losses arising from the change in fair value of derivatives are directly included in the profits and losses of the
current period, except that the part of the cash flow that is valid in the hedge is included in the other consolidated income and
transferred out when the hedged item affects the gain and loss of the current period.

      For a hybrid instrument containing an embedded derivative instrument, if the principal contract is a financial asset, the hybrid
instrument as a whole applies the relevant provisions of the financial asset classification. If the main contract is not a financial asset,
and the hybrid instrument is not measured at fair value and its changes are included in the current profit and loss for accounting, the
embedded derivative does not have a close relationship with the main contract in terms of economic characteristics and risks, and it is
If the instruments with the same conditions and exist separately meet the definition of derivative instruments, the embedded
derivative instruments are separated from the mixed instruments and treated as separate derivative financial instruments. If the fair
value of the embedded derivative on the acquisition date or the subsequent balance sheet date cannot be measured separately, the
hybrid instrument as a whole is designated as a financial asset or financial liability measured at fair value and whose changes are
included in the current profit or loss.

      (5) Financial instrument Less

      The Company shall confirm the preparation for loss on the basis of expected credit loss for financial assets measured at
amortization costs, creditor's rights investments measured at fair value, contractual assets, leasing receivables, loan commitments and
financial guarantee contracts, etc.

      ① Measurement of expected credit losses of accounts receivable

      The expected credit loss refers to the weighted average of the credit losses of financial instruments that are weighted by the risk
of default. Credit loss refers to the difference between all contractual cash flows receivable from the contract and all cash flows
expected to be received by the Company at the original actual interest rate, that is, the present value of all cash shortages. Among
them, the financial assets which have been purchased or born by the Company shall be discounted according to the actual rate of
credit adjustment of the financial assets.

      The expected lifetime credit loss is the expected credit loss due to all possible default events during the entire expected life of
the financial instrument.

      Expected credit losses in the next 12 months are expected to result from possible defaults in financial instruments within 12
months after the balance sheet date (or estimated duration of financial instruments if the expected duration is less than 12 months)
Credit losses are part of the expected lifetime credit loss.

      On each balance sheet day, the company measures the expected credit losses of financial instruments at different stages. Where
the credit risk has not increased significantly since the initial confirmation of the financial instrument, it is in the first stage. The
Company measures the preparation for loss according to the expected credit loss in the next 12 months. Where the credit risk has
increased significantly since the initial confirmation but the credit impairment has not occurred, the financial instrument is in the
second stage. Where a credit impairment has occurred since the initial confirmation of the financial instrument, it shall be in the third
stage, and the Company shall prepare for measuring the expected credit loss of the whole survival period of the instrument.

      For financial instruments with low credit risk on the balance sheet date, the company assumes that the credit risk has not
increased significantly since the initial recognition, and measures the loss provision based on the expected credit losses in the next 12

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months.

      For financial instruments that are in the first and second stages and with lower credit risk, the company calculates interest
income based on their book balances and actual interest rates without deduction for impairment provision. For financial instruments
in the third stage, interest income is calculated based on the amortized cost and the actual interest rate after the book balance minus
the provision for impairment.

      Regarding bills receivable, accounts receivable and financing receivables, regardless of whether there is a significant financing
component, the company measures the loss provision based on the expected credit losses throughout the duration.

      A Accounts receivable

      Where there is objective evidence of impairment, as well as other receivable instruments, receivables, other receivables,
receivables financing and long-term receivables applicable to individual assessments, separate impairment tests are performed to
confirm expected credit losses and prepare individual impairment. For notes receivable, accounts receivable, other receivables,
financing of receivables and long-term receivables for which there is no objective evidence of impairment, or when individual
financial assets cannot be assessed at a reasonable cost, the company divides bills receivable, accounts receivable, other receivables,
receivable financing and long-term receivables into several combinations based on credit risk characteristics, and calculates expected
credit losses on the basis of the combination. The basis for determining the combination is as follows:

      The basis for determining the combination of notes receivable is as follows:

      Notes Receivable Combination 1 Commercial Acceptance Bill

      Notes Receivable Combination 2 Bank Acceptance Bill

      For Notes receivable divided into portfolios, the company refers to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate
within the next 12 months or the entire duration Expected credit losses.

      The basis for determining the combination of accounts receivable is as follows:

      Accounts receivable combination 1 Accounts receivable business

      Other receivable portfolio 2 Receivables from related parties within the scope of consolidation

      Accounts receivable combination 3 Real estate receivable business

      Accounts receivable combination 4 Others receivable business

      For the accounts receivable divided into a combination, the company refers to the historical credit loss experience, combined
with the current situation and the forecast of the future economic situation, compiles the account receivable age and the whole
expected credit loss rate table, and calculates the expected credit loss.

      The basis for determining the combination of other receivables is as follows:

      Other receivable portfolio 1 Interest receivable

      Portfolio of other receivables 2 Dividends receivable

      Other combinations of receivables 3 Deposit and margin receivable

      Other receivable portfolio 4 Receivable advances

      Combination of other receivables 5 Value-added tax receivable is increased and refunded

      Other receivable portfolio 6 Receivables from related parties within the scope of consolidation


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      Other receivables portfolio 7 Other receivables

      For other receivables divided into portfolios, the company refers to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate
within the next 12 months or the entire duration Expected credit losses.

      The basis for determining the combination of receivables financing is as follows:

      Receivables financing portfolio 1 bank acceptance bill

      For Notes receivable divided into portfolios, the company refers to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate
within the next 12 months or the entire duration Expected credit losses.

      Other debt investment

      For other receivables divided into portfolios, the company refers to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate
within the next 12 months or the entire duration Expected credit losses.

      ② Lower credit risk

      If the risk of default on financial instruments is low, the borrower’s ability to meet its contractual cash flow obligations in the
short term is strong, and even if the economic situation and operating environment are adversely changed over a long period of time,
it may not necessarily reduce the receivables' performance of their contractual cash. The ability of the flow obligation, the financial
instrument is considered to have a lower credit risk.

      ③ Significant increase in credit risk

      The company compares the default probability of the financial instrument during the expected lifetime determined by the
balance sheet date with the default probability of the expected lifetime during the initial confirmation to determine the relative
probability of the default probability of the financial instrument during the expected lifetime Changes to assess whether the credit
risk of financial instruments has increased significantly since initial recognition.

      In determining whether the credit risk has increased significantly since the initial recognition, the Company considers
reasonable and evidenced information, including forward-looking information, that can be obtained without unnecessary additional
costs or effort. The information considered by the company includes:

      A. Significant changes in internal price indicators resulting from changes in credit risk;

      B. Adverse changes in business, financial or economic conditions that are expected to cause significant changes in the debtor’s
ability to perform its debt service obligations;

      C. Whether the actual or expected operating results of the debtor have changed significantly; whether the regulatory, economic
or technical environment of the debtor has undergone significant adverse changes;

      D. Whether there is a significant change in the value of the collateral used as debt collateral or the guarantee provided by a
third party or the quality of credit enhancement. These changes are expected to reduce the debtor’s economic motivation for
repayment within the time limit specified in the contract or affect the probability of default;

      E. Whether there is a significant change in the economic motivation that is expected to reduce the debtor's repayment according
to the contractual deadline;

      F. Anticipated changes to the loan contract, including whether the expected violation of the contract may result in the
exemption or revision of contract obligations, granting interest-free periods, rising interest rates, requiring additional collateral or


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guarantees, or making other changes to the contractual framework of financial instruments change;

      G. Whether the expected performance and repayment behavior of the debtor has changed significantly;

      H. Whether the contract payment is overdue for more than (including) 30 days.

      Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantly on the basis
of a single financial instrument or combination of financial instruments. When conducting an assessment based on a combination of
financial instruments, the Company can classify financial instruments based on common credit risk characteristics, such as overdue
information and credit risk ratings.

      If the overdue period exceeds 30 days, the company has determined that the credit risk of financial instruments has increased
significantly. Unless the Company does not have to pay excessive costs or efforts to obtain reasonable and warranted information, it
proves that although it has exceeded the time limit of 30 days agreed upon in the Contract, credit risks have not increased
significantly since the initial confirmation.

      ④ Financial assets with credit impairment

      The company assesses on the balance sheet date whether financial assets measured at amortized cost and credit investments
measured at fair value and whose changes are included in other comprehensive income have undergone credit impairment. When one
or more events that adversely affect the expected future cash flows of a financial asset occur, the financial asset becomes a financial
asset that has suffered a credit impairment. Evidence that credit impairment has occurred in financial assets includes the following
observable information:

      Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor, such as payment of
interest or default or overdue of principal; (B) The concession that the debtor would not make under any other circumstances for
economic or contractual considerations relating to the financial difficulties of the debtor; The debtor is likely to be bankrupt or
undertake other financial restructuring; The financial difficulties of the issuer or debtor lead to the disappearance of the active market
for the financial asset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a credit loss has
occurred.

      ⑤ Presentation of expected credit loss measurement

      In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Company re-measures
the expected credit losses on each balance sheet date, and the increase or reversal of the loss provision resulting therefrom is included
as an impairment loss or gain. Current profit and loss. For financial assets measured at amortized cost, the loss allowance offsets the
book value of the financial asset listed on the balance sheet; for debt investments measured at fair value and whose changes are
included in other comprehensive income, the company Recognition of its loss provisions in gains does not offset the book value of
the financial asset.

      ⑥ Canceled

      If it is no longer reasonably expected that the contract cash flow of the financial assets will be fully or partially recovered, the
book balance of the financial assets will be directly reduced. Such write-off constitute the derecognition of related financial assets.
This usually occurs when the company determines that the debtor has no assets or sources of income that generate sufficient cash
flow to cover the amount that will be written down.

      If the financial assets that have been written down are recovered in the future, the reversal of the impairment loss is included in
the profit or loss of the current period.

      (6) Transfer of financial assets

      The transfer of financial assets refers to the following two situations:


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      A. Transfer the contractual right to receive cash flow of financial assets to another party;

      B. Transfers the financial assets to the other party in whole or in part, but reserves the contractual right to collect the cash flow
of the financial assets and undertakes the contractual obligation to pay the collected cash flow to one or more recipients.

      ① De-identification of transferred financial assets

      Those who have transferred almost all risks and rewards in the ownership of financial assets to the transferee, or have neither
transferred nor retained almost all the risks and rewards in the ownership of financial assets, but have given up control of the
financial assets, terminate the confirmation The financial asset.

      In determining whether control over the transferred financial asset has been waived, the actual capacity of the transferor to sell
the financial asset is determined. If the transferor is able to sell the transferred financial assets wholly to a third party that does not
have a relationship with them, and has no additional conditions to limit the sale, it indicates ds has waived control over the financial
assets.

      The company pays attention to the essence of financial asset transfer when judging whether financial asset transfer meets the
condition of financial asset termination.

      If the overall transfer of financial assets meets the conditions for termination of confirmation, the difference between the
following two amounts is included in the current profit and loss:

      A. Continuing identification of transferred Book value;

      B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fair value
of the transfer in respect of the termination recognized portion of the amount previously charged directly to the other consolidated
proceeds (the financial assets involved in the transfer are those classified in accordance with Article 18 of Enterprise Accounting
Standard No. 22 - Financial Instruments Recognition and Measurement as measured by the fair value and whose change is charged to
the other consolidated proceeds).

      If the partial transfer of financial assets meets the conditions for derecognition, the book value of the entire transferred financial
assets will be included in the derecognized part and the unterminated part (in this case, the retained service assets are regarded as part
of the continued recognition of financial assets) Between them, they are apportioned according to their respective relative fair values
on the transfer date, and the difference between the following two amounts is included in the current profit and loss:

      A. Termination of the book value of the recognized portion on the date of derecognition;

      B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fair value
of the transfer in respect of the termination recognized portion of the amount previously charged to the other consolidated proceeds
(the financial assets involved in the transfer are those classified in accordance with Article 18 of Enterprise Accounting Standard No.
22 - Financial Instruments Recognition and Measurement as measured by the fair value and whose change is charged to the other
consolidated proceeds).

      ② Continue to be involved in the transferred financial assets

      If neither transfer nor retain almost all the risks and rewards of the ownership of financial assets, and have not given up control
of the financial assets, the relevant financial assets should be confirmed according to the extent of their continued involvement in the
transferred financial assets, and the relevant liabilities should be recognized accordingly.

      The extent to which the transferred financial assets continue to be involved refers to the extent to which the enterprise
undertakes the risk or compensation of the value change of the transferred financial assets.

      (III) Continuing identification of transferred financial assets



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       Where almost all risks and remuneration in relation to ownership of the transferred financial assets are retained, the whole of
the transferred financial assets shall continue to be recognized and the consideration received shall be recognized as a financial
liability.

       The financial asset and the recognized related financial liabilities shall not offset each other. In the subsequent accounting
period, the enterprise shall continue to recognize the income (or gain) generated by the financial asset and the costs (or losses)
incurred by the financial liability.

       (7) Deduction of financial assets and liabilities

       Financial assets and financial liabilities should be listed separately in the balance sheet, and cannot be offset against each other.
However, if the following conditions are met, the net amount offset by each other is listed in the balance sheet:

       The company has a statutory right to offset the confirmed amount, and such legal right is currently enforceable;

       The company plans to settle the net assets or realize the financial assets and liquidate the financial liabilities at the same time.

       The transferring party shall not offset the transferred financial assets and related liabilities if it does not meet the conditions for
terminating the recognition.

       (8) Recognition of fair value of Finance instruments

       For the method for determining the fair value of financial assets and financial liabilities, see 30 (1) Fair value measurement in
this section, V. Important accounting policies and accounting estimates.




10. Notes receivable

        For details, please refer to 11. Accounts Receivable in V. Important Accounting Policies and Accounting Estimates in this
section.


11. Account receivable

       The Company shall confirm the preparation for loss on the basis of expected credit loss for financial assets measured at
amortization costs, creditor's rights investments measured at fair value, contractual assets, leasing receivables, loan commitments and
financial guarantee contracts, etc.

       ① Measurement of expected credit losses of accounts receivable

       The expected credit loss refers to the weighted average of the credit losses of financial instruments that are weighted by the risk
of default. Credit loss refers to the difference between all contractual cash flows receivable from the contract and all cash flows
expected to be received by the Company at the original actual interest rate, that is, the present value of all cash shortages. Among
them, the financial assets which have been purchased or born by the Company shall be discounted according to the actual rate of
credit adjustment of the financial assets.

       The expected lifetime credit loss is the expected credit loss due to all possible default events during the entire expected life of
the financial instrument.

       Expected credit losses in the next 12 months are expected to result from possible defaults in financial instruments within 12
months after the balance sheet date (or estimated duration of financial instruments if the expected duration is less than 12 months)
Credit losses are part of the expected lifetime credit loss.

       On each balance sheet day, the company measures the expected credit losses of financial instruments at different stages. Where

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the credit risk has not increased significantly since the initial confirmation of the financial instrument, it is in the first stage. The
Company measures the preparation for loss according to the expected credit loss in the next 12 months. Where the credit risk has
increased significantly since the initial confirmation but the credit impairment has not occurred, the financial instrument is in the
second stage. Where a credit impairment has occurred since the initial confirmation of the financial instrument, it shall be in the third
stage, and the Company shall prepare for measuring the expected credit loss of the whole survival period of the instrument.

      For financial instruments with low credit risk on the balance sheet date, the company assumes that the credit risk has not
increased significantly since the initial recognition, and measures the loss provision based on the expected credit losses in the next 12
months.

      For financial instruments that are in the first and second stages and with lower credit risk, the company calculates interest
income based on their book balances and actual interest rates without deduction for impairment provision. For financial instruments
in the third stage, interest income is calculated based on the amortized cost and the actual interest rate after the book balance minus
the provision for impairment.

      Regarding bills receivable, accounts receivable, contract assets and financing receivables, regardless of whether there is a
significant financing component, the company measures the loss provision based on the expected credit losses throughout the
duration.

      A Accounts receivable

      Where there is objective evidence of impairment, as well as other receivable instruments, receivables, other receivables,
receivables financing and long-term receivables applicable to individual assessments, separate impairment tests are performed to
confirm expected credit losses and prepare individual impairment. For notes receivable, accounts receivable, other receivables,
financing of receivables and long-term receivables for which there is no objective evidence of impairment, or when individual
financial assets cannot be assessed at a reasonable cost, the company divides bills receivable, accounts receivable, other receivables,
receivable financing and long-term receivables into several combinations based on credit risk characteristics, and calculates expected
credit losses on the basis of the combination. The basis for determining the combination is as follows:

      The basis for determining the combination of notes receivable is as follows:

      Notes Receivable Combination1 Commercial Acceptance Bill

      Notes Receivable Combination1 Commercial Acceptance Bill

      For Notes receivable divided into portfolios, the company refers to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate
within the next 12 months or the entire duration Expected credit losses.

      The basis for determining the combination of accounts receivable is as follows:

      Accounts receivable combination 1 Accounts receivable business

      Other receivable portfolio 2 Receivables from related parties within the scope of consolidation

      Accounts receivable combination 3 Real estate receivable business

      Accounts receivable combination 4 Others receivable business

      For the accounts receivable divided into a combination, the company refers to the historical credit loss experience, combined
with the current situation and the forecast of the future economic situation, compiles the account receivable age and the whole
expected credit loss rate table, and calculates the expected credit loss.

      The basis for determining the combination of contract assets and the method for calculating expected credit losses are the same


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as accounts receivable.



      The basis for determining the combination of other receivables is as follows:

      Other receivable portfolio 1 Interest receivable

      Portfolio of other receivables 2 Dividends receivable

      Other combinations of receivables 3 Deposit and margin receivable

      Other receivable portfolio 4 Receivable advances

      Combination of other receivables 5 Value-added tax receivable is increased and refunded

      Other receivable portfolio 6 Receivables from related parties within the scope of consolidation

      Other receivables portfolio 7 Other receivables

      For other receivables divided into portfolios, the company refers to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate
within the next 12 months or the entire duration Expected credit losses.

      The basis for determining the combination of receivables financing is as follows:

      Receivables financing portfolio 1 bank acceptance bill

      For Notes receivable divided into portfolios, the company refers to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate
within the next 12 months or the entire duration Expected credit losses.

      Other debt investment

      For other receivables divided into portfolios, the company refers to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate
within the next 12 months or the entire duration Expected credit losses.

      ② Lower credit risk

      If the risk of default on financial instruments is low, the borrower’s ability to meet its contractual cash flow obligations in the
short term is strong, and even if the economic situation and operating environment are adversely changed over a long period of time,
it may not necessarily reduce the receivables' performance of their contractual cash. The ability of the flow obligation, the financial
instrument is considered to have a lower credit risk.

      ③ Significant increase in credit risk

      The company compares the default probability of the financial instrument during the expected lifetime determined by the
balance sheet date with the default probability of the expected lifetime during the initial confirmation to determine the relative
probability of the default probability of the financial instrument during the expected lifetime Changes to assess whether the credit
risk of financial instruments has increased significantly since initial recognition.

      In determining whether the credit risk has increased significantly since the initial recognition, the Company considers
reasonable and evidenced information, including forward-looking information, that can be obtained without unnecessary additional
costs or effort. The information considered by the company includes:

      A. Significant changes in internal price indicators resulting from changes in credit risk;


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      B. Adverse changes in business, financial or economic conditions that are expected to cause significant changes in the debtor’s
ability to perform its debt service obligations;

      C. Whether the actual or expected operating results of the debtor have changed significantly; whether the regulatory, economic
or technical environment of the debtor has undergone significant adverse changes;

      D. Whether there is a significant change in the value of the collateral used as debt collateral or the guarantee provided by a
third party or the quality of credit enhancement. These changes are expected to reduce the debtor’s economic motivation for
repayment within the time limit specified in the contract or affect the probability of default;

      E. Whether there is a significant change in the economic motivation that is expected to reduce the debtor's repayment according
to the contractual deadline;

      F. Anticipated changes to the loan contract, including whether the expected violation of the contract may result in the
exemption or revision of contract obligations, granting interest-free periods, rising interest rates, requiring additional collateral or
guarantees, or making other changes to the contractual framework of financial instruments change;

      G. Whether the expected performance and repayment behavior of the debtor has changed significantly;

      H. Whether the contract payment is overdue for more than (including) 30 days.

      Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantly on the basis
of a single financial instrument or combination of financial instruments. When conducting an assessment based on a combination of
financial instruments, the Company can classify financial instruments based on common credit risk characteristics, such as overdue
information and credit risk ratings.

      If the overdue period exceeds 30 days, the company has determined that the credit risk of financial instruments has increased
significantly. Unless the Company does not have to pay excessive costs or efforts to obtain reasonable and warranted information, it
proves that although it has exceeded the time limit of 30 days agreed upon in the Contract, credit risks have not increased
significantly since the initial confirmation.

      ④ Financial assets with credit impairment

      The company assesses on the balance sheet date whether financial assets measured at amortized cost and credit investments
measured at fair value and whose changes are included in other comprehensive income have undergone credit impairment. When one
or more events that adversely affect the expected future cash flows of a financial asset occur, the financial asset becomes a financial
asset that has suffered a credit impairment. Evidence that credit impairment has occurred in financial assets includes the following
observable information:

      Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor, such as payment of
interest or default or overdue of principal; (B) The concession that the debtor would not make under any other circumstances for
economic or contractual considerations relating to the financial difficulties of the debtor; The debtor is likely to be bankrupt or
undertake other financial restructuring; The financial difficulties of the issuer or debtor lead to the disappearance of the active market
for the financial asset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a credit loss has
occurred.

      ⑤ Presentation of expected credit loss measurement

      In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Company re-measures
the expected credit losses on each balance sheet date, and the increase or reversal of the loss provision resulting therefrom is included
as an impairment loss or gain. Current profit and loss. For financial assets measured at amortized cost, the loss allowance offsets the
book value of the financial asset listed on the balance sheet; for debt investments measured at fair value and whose changes are



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included in other comprehensive income, the company Recognition of its loss provisions in gains does not offset the book value of
the financial asset.

      ⑥ Canceled

      If it is no longer reasonably expected that the contract cash flow of the financial assets will be fully or partially recovered, the
book balance of the financial assets will be directly reduced. Such write-off constitute the derecognition of related financial assets.
This usually occurs when the company determines that the debtor has no assets or sources of income that generate sufficient cash
flow to cover the amount that will be written down.

      If the financial assets that have been written down are recovered in the future, the reversal of the impairment loss is included in
the profit or loss of the current period.


The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.


12. Receivable financing

       For details, please refer to 11. Accounts Receivable in V. Important Accounting Policies and Accounting Estimates in this
section.




13. Other receivables

Methods for Determining Expected Credit Loss of Other Receivables and Accounting Processing Methods

       For details, please refer to 11. Accounts Receivable in V. Important Accounting Policies and Accounting Estimates in this
section.


14. Inventories

       (1) Classification of inventories

       Inventory refers to the finished products or commodities held by the Company for sale in its daily activities, the materials and
materials consumed in the course of production, in the course of production or in the course of providing labor services, including
subcontracting materials, raw materials, in-process products, finished products, finished products, inventories, turnover materials,
development costs, development products and assets formed by construction contracts, etc.

       (2) Pricing of delivering inventory

       Inventories are measured at cost when procured. Raw materials, products in process and commodity stocks in transit are
measured by the weighted average method.

       The real estate business inventory mainly includes inventory materials, products under development, completed development
products, and development products intended to be sold but temporarily rented out. Inventory is measured at the actual costs when
the fixed assets are obtained The actual costs of development products include land transfer payment, infrastructure and facility costs,
installation engineering costs, borrows before completion of the development and other costs during the development process. The
special maintenance funds collected in the first period are included in the development overheads. The actual costs of the
development product is priced using the separate pricing method.



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       Construction contracts are measured by the effective cost, including direct and indirect expenses generated before the contracts
are fulfilled. Costs generated and recognized accumulatively by construction in process and settled payment are listed in the balance
sheet as offset net amounts. The excessive part of the sum of the generated costs and recognized gross profit (loss) over the settled
payment is listed inventories; the excessive part of the settled payment over the sum of the generated costs and recognized gross
profit (loss) is listed as the prepayment received.

       Travel and bidding expenses generated by execution of contracts, if they can be separated and reliably measured and it is likely
to enter into contracts, are accounted as the contract cost when the contracts are entered into; or into the current gain/loss account if
the conditions are not met.

       (3) Inventory system

       The company inventory adopts the perpetual inventory system, counting at least once a year, the inventory profit and loss
amount is included in the current year's profit and loss.

       (4) Recognition of inventory realizable value and providing of impairment provision

       On the balance sheet date, inventories are accounted depending on which is lower between the cost and the net realizable value.
If the cost is higher than the net realizable value, the impairment provision will be made.

       The realizable net value of inventory should be recognized based on solid evidence with the purpose of the inventory and
after-balance-sheet-date events taken into consideration.

       (1) In the course of normal production and operation, the net realizable value of finished goods, commodities and materials
directly used for sale shall be determined by the estimated price of the inventory minus the estimated cost of sale and related taxes.
The inventory held for the execution of a sales contract or a labor contract shall be measured on the basis of the contract price as its
net realizable value; If the quantity held is greater than the quantity ordered under the sales contract, the net realizable value of the
excess inventory is measured on the basis of the general sales price. For materials used for sale, the market price shall be used as the
measurement basis for the net realizable value.

       ②In the normal production and operation process, the inventory of materials that need to be processed is determined by the
amount of the estimated selling price of the finished product minus the estimated cost to be incurred at the time of completion,
estimated sales expenses and related taxes Realize the net value. If the net realizable value of the finished product produced by it is
higher than the cost, the material is measured at cost; If the decrease in the price of the material indicates that the net realizable value
of the finished product is lower than the cost, the material is measured as the net realizable value and the inventory is prepared for a
decrease based on its difference.

       ③ Depreciation preparation of inventory is generally based on a single inventory item; For a large number of inventories with
a lower unit price, they are accrued by inventory type.

       ④ If the factors affecting the previous write-down of inventory value have disappeared on the balance sheet date, the amount
of the write-down will be restored and transferred back within the amount of inventory depreciation reserve that has been accrued,
and the amount returned will be included in the current profit and loss.

       (5) Methods of amortization of swing materials

       ① Low-value consumables are amortized on on-off amortization basis at using.

       ② Packages are amortized on on-off amortization basis at using.




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15. Contract assets

      The company lists the right to receive consideration for the transferred goods or services (the right depends on other factors
other than the passage of time) as a contract asset, and it is confirmed when it obtains the unconditional (that is, only depending on
the passage of time) right to receive payment Accounts receivable; on the contrary, the company's obligation to transfer goods or
services to customers for consideration received or receivable from customers is listed as contract liabilities. When the company
fulfills its obligations to transfer goods or provide services to customers, contract liabilities are recognized as revenue. The company
presents the contract assets and contract liabilities under the same contract as a net amount.
      Contract assets are recognized as impairment provision based on expected credit losses. For details, see 11. Accounts
Receivable in 5. Important Accounting Policies and Accounting Estimates in this section.


16. Contract costs

    If the cost incurred in fulfilling the contract does not fall within the scope of other accounting standards and meets the following
conditions at the same time, the company will recognize it as an asset as the contract performance cost:
    (1) The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing expenses
(or similar expenses), clearly borne by the customer, and other costs incurred only due to the contract; ( 2) This cost increases the
company's future resources for fulfilling its performance obligations; (3) This cost is expected to be recovered.
    Assets related to the contract cost are amortized on the same basis as the commodity revenue recognition related to the asset and
included in the current profit and loss.
    If the book value of the asset related to the contract cost is higher than the difference between the following two items, the excess
will be provided for impairment and recognized as an asset impairment loss: (1) The company is expected to be able to transfer the
goods related to the asset The remaining consideration obtained; (2) is the estimated cost of transferring the relevant goods. If the
depreciation factors in the previous period have changed, and the difference between the aforementioned two items is higher than the
book value of the asset, the asset depreciation reserve that has been withdrawn should be reversed and included in the current profit
and loss.


17. Long-term share equity investment

       The Group's long-term equity investment includes control on invested entities and significant impacts on equity investment.
Invested entities on which the Group has significant impacts are associates of the Group.

       (1) Basis for recognition of common control and major influence on invested entities

       Common control refers to the common control of an arrangement in accordance with the relevant agreement, and the relevant
activities of the arrangement must be agreed upon by the participants who share control. In determining whether there is common
control, the first step is to determine whether all or a group of participants collectively control the arrangement, which is considered
collective control by all or a group of participants if all or a group of participants must act together to determine the activities
associated with the arrangement. Secondly, it is judged whether the decision on related activities of the arrangement must be agreed
by the participants who collectively control the arrangement. If there is a combination of two or more parties that can collectively
control an arrangement, it does not constitute joint control. When judging whether there is joint control, the protective rights enjoyed
are not considered.

       Major influence refers to the power to participate in decision-making of financial and operation policies of a company, but
cannot control or jointly control the making of the policies. When considering whether the Company can impose significant impacts
on the invested entity, impacts of conversion of shares with voting rights held directly or indirectly by the investor and voting rights



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that can be executed in this period held by the investor and other party into shares of the invested entity should be considered.

       If the Company directly or through subsidiaries holds more than 20% (inclusive) but less than 50% of the shares with voting
rights of the invested entity, unless there is clear evidence proving that the Company cannot participate the decision-making of
production and operation of the invested entity, the Company has major influence on the invested entity.

       (2) Recognition of initial investment costs

     Long-term equity investments formed by merger of enterprises shall be determined in accordance with the following provisions:

            A. In the case of an enterprise merger under the same control, where the merging party makes a valuation of the merger
     by payment of cash, transfer of non-cash assets or undertaking liabilities, the share of the book value of the owner's interest in
     the final controlling party's consolidated financial statements as the initial investment cost of the long-term equity investment at
     the date of the merger. The difference between the initial investment cost of long-term equity investment and the cash paid, the
     transferred non-cash assets and the book value of the debt assumed shall be adjusted to the capital reserve; if the capital reserve
     is insufficient to offset, the retained earnings shall be adjusted;

            Long-term equity investment generated by enterprise merger: for long-term equity investment obtained by merger of
     enterprises under common control, the obtained share of book value of the interests of the merged party’s owner in the
     consolidate financial statements on the merger date is costs; for long-term equity investment obtained by merger of enterprises
     not under common control, the merger cost is the investment cost. Adjust the capital reserve according to the difference between
     the initial investment cost of long-term equity investment and the total face value of the issued shares. If the capital reserve is
     insufficient to offset or reduce, the retained income shall be adjusted;

            For merger of entities under different control, the merger cost is the fair value of the asset paid, liability undertaken, and
     equity securities issued for exchanging of control power over the entities at the day of acquisition. Agency expenses and other
     administrative expenses such as auditing, legal consulting, or appraisal services occurred relating to the merger of entities are
     accounted into current income account when occurred.

     Long-term equity investments formed by merger of enterprises shall be determined in accordance with the following provisions:

       For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost. Initial
investment costs include expenses, taxes and other necessary expenditures directly related to the acquisition of long-term equity
investments;

       B. Long-term equity investments acquired from the issuance of interest securities are the initial investment costs based on the
fair value of the issue interest securities;

       C. For long-term equity investments obtained through non-monetary asset exchanges, if the exchange has commercial
substance and the fair value of the exchanged assets or exchanged assets can be reliably measured, the fair value of the exchanged
assets and relevant taxes shall be used as the initial Investment cost, the difference between the fair value and book value of the
swapped-out asset is included in the current profit and loss; if the non-monetary asset exchange does not meet the above two
conditions at the same time, the book value of the swapped-out asset and relevant taxes will be used as the initial investment cost.

       D. Long-term equity investments acquired through debt restructuring determine their recorded value at the fair value of the
waived claims and other costs such as taxes directly attributable to the assets and account for the difference between the fair value
and the book value of the waived claims.

       (3) Subsequent measurement and recognition of gain/loss

       The Company uses the cost method to measure long-term share equity investment in which the Company can control the
invested entity; and uses the equity method to measure long-term share equity investment in which the Company has substantial
influence on the invested entity.


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      ① Cost

      For the long-term equity investment measured on the cost basis, except for the announced cash dividend or profit included in
the practical cost or price when the investment was made, the cash dividends or profit distributed by the invested entity are
recognized as investment gains in the current gain/loss account.

      Equity

      Gains from long-term equity investment measured by equity

      When the equity method is used to measure long-term equity investment, the investment cost will not be adjusted if the
investment cost of the long-term equity investment is larger than the share of fair value of the recognizable assets of the invested
entity. When it is smaller than the share of fair value of the recognizable assets of the invested entity, the book value will be adjusted
and the difference is included in the current gains of the investment.

      When the equity method is used, the current investment gain is the share of the net gain realized in the current year that can be
shared or borne, recognized as investment gain and other misc. income. The book value of the long-term equity investment is
adjusted accordingly. The book value of the long-term equity investment should be accordingly decreased based on the share of profit
or cash dividend announced by the invested entity; according to other changes in the owner’s equity except for net profit and loss,
other misc income and profit distribution of the invested entity, adjust the book value of the long-term equity investment and record it
in the capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized, it is recognized after
the net profit of the invested entity is adjusted based on the fair value of the recognizeable assets of the invested entity according to
the Company's accounting policies and accounting period. Where the accounting policy and accounting period adopted by the
Invested unit are inconsistent with the Company, the financial statements of the Invested unit shall be adjusted in accordance with the
accounting policy and accounting period of the Company, and the investment income and other consolidated income shall be
recognized. Internal transaction gain not realized between the Company and affiliates is measured according to the shareholding
proportion and the investment gains is recoginzied after deduction. The unrealized internal transaction loss between the Company
and the invested entity is the impairment loss of transferred assets and should not be written off.

      Where substantial influence on invested entities is imposed or joint control is implemented due to increase in investment, the
sum of the fair value of the original equity and increased investment on the conversion date is the initial investment cost under the
equity method. The difference between the fair value and book value of the original equity on the conversion date and the
accumulative change in the fair value originally accounted in other misc. income should be transferred into the profit and loss of the
current period using the equity method.

      Where joint control or substantial influence on invested entities is lost due to disposal of part of investment, the remaining
equity after the disposal should be treated according to the Enterprise Accounting Standard No.22 – Recognition and Measurement of
Financial Instruments from the date of losing the joint control or substantial influence. The difference between the fair value and
book value should be accounted the profit and loss of the current period. For other misc. incomes of original share equity investment
determined using the equity method, when the equity method is no longer used, it should be treated based on the same basis of the
treatment of related assets or liability of the invested entities; the other owners' interests related to the original share equity
investment should be transferred to gain/loss of the current period.

      (4) Equity investment held for sale

      For the remaining equity investments not classified as assets held for sale, the equity method is adopted for accounting
treatment.

      Equity investments classified as held for sale to associates that are no longer eligible to hold classified assets for sale are
retrospectively adjusted using the equity method starting from the date that they are classified as held for sale. The classification is
adjusted to hold the financial statements for the period to be sold.



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      (5) Impairment examination and providing of impairment provision

      For investments in subsidiaries, associates and joint ventures, the method of accruing asset impairment is shown in 23.
Long-term asset impairment in this section, V. Important accounting policies and accounting estimates.


XVIII. Investment real estates

      (1) Classification of investment real estate

      Investment real estates are held for rent or capital appreciation, or both. These include, inter alia:

      ① Leased land using right

      (2) the right to use the land that is transferred after holding and preparing for the increment.

      ③ Leased building

      (2) Measurement of investment real estate

      For investment real estates with an active real estate transaction market and the Company can obtain market price and other
information of same or similar real estates to reasonably estimate the investment real estates’ fair value, the Company will use the fair
value mode to measure the investment real estates subsequently. Variations in fair value are accounted into the current gain/loss
account.

      The fair value of investment real estates is determined with reference to the current market prices of same or similar real
estates in active markets; when no such price is available, with reference to the recent transaction prices and consideration of factors
including transaction background, date and district to reasonably estimate the fair value; or based on the estimated lease gains and
present value of related cash flows.

      For investment real estate under construction (including investment real estate under construction for the first time), if the fair
value cannot be reliably determined but the expected fair value of the real estate after completion is continuously and reliably
obtained, the investment real estate under construction is measured by cost. When the fair value can be measured reliably or after
completion (the earlier one), it is measured at fair value. For an investment real estate whose fair value is proven unable to be
obtained continuously and reliably by objective evidence, the real estate will be measured at cost basis until it is disposed and no
residual value remains as assumed.

      If the cost model is used for subsequent measurement of investment real estate, depreciation or amortization is calculated
according to the straight-line method after the cost of investment real estate minus accumulated impairment and net residual value.
See this section, V. Important accounting policies, for the method of accruing asset impairment 23. Impairment of long-term assets in
accounting estimates.

      The types of investment real estate, estimated economic useful life and estimated net residual value rate are determined as
follows:
                Type                    Service year (year)           Residual rate %           Annual depreciation rate %
Houses & buildings                             35-50                                    10.00             1.80-2.57




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19. Fixed assets

(1) Recognition conditions

      Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or for
operation & management, and have more than one accounting year of service life. Fixed assets are recognized at the actual cost of
acquisition when the following conditions are met: (1) The economic benefits associated with the fixed assets are likely to flow into
the enterprise. ② The cost of the fixed assets can be measured reliably. Overhaul cost generated by regular examination on fixed
assets is recognized as fixed assets costs when there is evidence proving that it meets fix assets recognition conditions. If not, it will
be accounted into the current gain/loss account.


(2) Depreciation method


                                                                                                                    Annual depreciation
           Type                Depreciation method              Service year               Residual rate
                                                                                                                           rate %

Houses & buildings          Average age                 35-50                        10.00%                      1.80%-2.57%

Mechanical equipment        Average age                 10.00                        10.00%                      9.00%

Transportation facilities   Average age                 5.00                         10.00%                      18.00%

Electronics and other
                            Average age                 5.00                         10.00%                      18.00%
devices

PV power plants             Average age                 20.00                        5.00%                       4.75%

The company calculates depreciation based on the average life method from the next month when the fixed assets reach the expected
usable state; for fixed assets for which depreciation provision is made, the depreciation rate will be determined after the accumulative
depreciation provision amount is deducted.
At end of each fiscal year, verification will be made on the useful life, predicted retained value, and depreciation basis. The useful life
will be adjusted if the useful life is different from the predicted one; the net residual value will be adjusted if the net residual value is
different from the predicted one.


(3) Recognition and pricing of financing leased fixed assets


      The Company transfers all the risks and rewards attached to the asset at substantially transferred to the lessee, it is recognized
as financial leasing, and the others are operational leasing. The cost of a fixed asset acquired by a financial lease is determined on the
basis of the lower of the fair value of the leased asset at the date of the lease and the present value of the minimum leased payment.
The Group adopts the depreciation policy same as the self-owned fixed assets to made provision for depreciation of leased assets.
Depreciation shall be accrued within the life of the leased assets if it is possible to reasonably determine that the leased assets will be
entitled to ownership upon the expiry of the lease term; Depreciation is accrued within a shorter period between the lease term and
the service life of the leased asset if it is unable to reasonably determine that the leased asset ownership can be acquired at the end of
the lease term.


20. Construction in process

       (1) Construction in progress is accounted for by project classification.

       (2) Standard and timing for transferring construction in process into fixed assets

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      The full expenditure incurred on the construction-in-progress project as a fixed asset is recorded as the value of the asset
before the asset is constructed to the intended usable state. This includes construction costs, the original cost of equipment, other
necessary expenditures incurred in order to enable the construction works to reach the intended usable status and the borrowing costs
incurred for the specific borrowing of the project and the general borrowing expenses incurred before the assets reach the intended
usable status. Construction in process will be transferred to fixed assets when it reaches the preset service condition. The fixed assets
that have reached the intended usable state but have not been completed shall be transferred to the fixed assets according to the
estimated value according to the estimated value according to the estimated value according to the project budget, cost or actual
project cost, etc. The depreciation of the fixed assets shall be accrued according to the company's fixed assets depreciation policy.
The original estimated value shall be adjusted according to the actual cost after the completion.




21. Borrowing expenses

      (1) Recognition principles for capitalization of borrowing expenses

      Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying the
conditions of capitalizing, are capitalized and accounted as cost of related asset.

      (1) Asset expenditure has occurred;

      ② The borrowing expense has already occurred;

      ③ Purchasing or production activity, which is necessary for the asset to reach the useful status, has already started.

      Other interest on loans, discounts or premiums and exchange differences are included in the income and loss incurred in the
current period.

      If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months,
capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenses will be capitalized
continuously.

      When the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing of borrowing
expenses shall be terminated.

      (2) Calculation of the capitalization amount of borrowing expense

      Interest expenses generated by special borrowings less the interests income obtained from the deposit of unused borrowings or
investment gains from temporary investment is capitalized; the capitalization amount for general borrowing is determined based on
the capitalization rate which is the exceeding part of the accumulative assets expense over weighted average of the assets expense of
the special borrowing/used general borrowing.

      If the assets that are constructed or produced under the condition of capitalization occupy the general borrowing, the interest
amount to be capitalized in the general borrowing shall be calculated and determined by multiplying the capital rate of the general
borrowing by the weighted average of the asset expenditure of the accumulated assets whose expenditure exceeds that of the
specialized borrowing. The capitalization ratio is the weighted average interest rate of general borrowings.


22. Intangible assets


(1) Pricing method, service life and depreciation test


      (1.1) Pricing of intangible assets

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       Recorded at the actual cost of acquisition.

       (1.2) Amortization of intangible assets

       ① Useful life of intangible assets with limited useful life
               Item                  Estimated useful life                                  Basis
Land using right                             Term            Use right assets
Trademarks and patents                     10 years          Reference to determine the lifetime of a company for which it
                                                             can bring economic benefits
Proprietary technology                     10 years          Reference to determine the lifetime of a company for which it
                                                             can bring economic benefits
Software                                  5, 10 years        Reference to determine the lifetime of a company for which it
                                                             can bring economic benefits

       At the end of each year, the Company will reexamine the useful life and amortization basis of intangible assets with limited
useful life.

       (2) Intangible assets which cannot be foreseeable to bring economic benefits to enterprises shall be regarded as intangible
assets whose useful life is uncertain. For intangible assets with uncertain service life, the company reviews the service life of
intangible assets with uncertain service life at the end of each year. If it is still uncertain after rechecking, it shall conduct an
impairment test on the balance sheet date.

       ③ Amortization of intangible assets

       For intangible assets with limited service life, the Company shall determine their service life at the time of acquisition, and
shall use the straight line method system to reasonably amortize their service life, and the amortization amount shall be included in
the profit and loss of the current period according to the beneficial items. The specific amortization amount is the amount after the
cost is deducted from the estimated residual value. For fixed assets for which depreciation provision is made, the depreciation rate
will be determined after the accumulative depreciation provision amount is deducted. The residual value of an intangible asset with
limited useful life is treated as zero, except where a third party undertakes to purchase the intangible asset at the end of its useful life
or to obtain expected residual value information based on the active market, which is likely to exist at the end of its useful life.

       Intangible assets with uncertain service life will not be amortized. At the end of each year, the useful life of intangible assets
with uncertain useful life is reviewed, and if there is evidence that the useful life of intangible assets is limited, the useful life is
estimated and the system is reasonably amortized within the expected useful life.

       (1.3) Impairment test of intangible assets

       For details, see 23. Long-term asset impairment in this section, V. Important accounting policies and accounting estimates.


(2) Accounting policies for internal R&D expenses


       (2.1) Specific standard for distinguish between research and development stage

       ① The company takes the information and related preparatory activities for further development activities as the research
stage, and the intangible assets expenditure in the research stage is included in the current profit and loss period.

       ② The development activities carried out after the company has completed the research stage as the development stage.

       (2.2) Specific conditions for capitalization of expenditures in the development phase

       Expenditures in the development phase can be recognized as intangible assets only when the following conditions are met:


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       A. It is technically feasible to complete the intangible asset so that it can be used or sold;

       B. Have the intention to complete the intangible asset and use or sell it;

       C. The way intangible assets generate economic benefits, including the ability to prove that the products produced by the
intangible assets exist in the market or the intangible assets themselves exist in the market, and the intangible assets will be used
internally, which can prove their usefulness;

       D. Have sufficient technical, financial and other resource support to complete the development of the intangible asset, and
have the ability to use or sell the intangible asset;

       E. The expenditure attributable to the development stage of the intangible asset can be reliably measured.


23. Assets impairment


       The Group uses the cost mode to continue measuring the assets impairment to investment real estate, fixed assets construction
in progress, intangible assets and goodwill (except for the inventories, investment real estate measured by the fair value mode,
deferred income tax assets and financial assets). The method is determined as follows:

       The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists, the Company
estimates the recoverable amount and conducts the impairment test. Impairment test is conducted annually for goodwill generated by
mergers and intangible assets that have not reached the useful condition no matter whether the impairment sign exists.

       The recoverable amount is determined by the higher of the net of fair value minus disposal expense and the present value of
the predicted future cash flow. The Company estimates the recoverable amount on the individual asset item basis; whether it is hard
to estimate the recoverable amount on the individual asset item basis, determine the recoverable amount based on the asset group that
the assets belong to. The assets group is determined by whether the main cash flow generated by the group is independent from those
generated by other assets or assets groups.

       When the recoverable amount of the assets or assets group is lower than its book value, the Company writes down the book
value to the recoverable amount, the write-down amount is accounted into the current income account and the assets impairment
provision is made.

       For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonable measures
since the purchase day to related asset groups; those cannot be amortized to related assets groups are amortized to related
combination of asset groups. The related asset groups or combination of asset groups refer to those that can benefit from the
synergistic effect of mergers and must not exceed to the reporting range determined by the Company.

       When the impairment test is conducted, if there is sign of impairment to the asset group or combination of asset groups related
to goodwill, first perform impair test for asset group or combination of asset groups without goodwill and calculate the recoverable
amount and recognize the related impairment loss. Then conduct impairment test on those with goodwill, compare the book value
with recoverable amount. If the recoverable amount is lower than the book value, recognize the impairment loss of the goodwill.

       Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.


24. Long-term amortizable expenses

       The long-term outstanding expenses shall be accounted for all expenses incurred by the Company but which shall be borne by
the current and future periods for more than one year, and the long-term outstanding expenses shall be amortized averagely within the
benefit period.



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25. Contract liabilities

For details, please refer to 15. Contract assets in 5. Important accounting policies and accounting estimates in this section.


26. Staff remuneration

(1) Accounting of operational leasing

         ① Basic salary of employees (salary, bonus, allowance, subsidy)

         In the accounting period for which the staff and workers provide services, the Company shall confirm the actual short-term
remuneration as liabilities and shall account for the current income and loss, except as required or permitted by other accounting
standards.

         ② Employee welfare

         The employee benefits incurred by the Company shall be included in the current profit and loss or related asset costs according
to the actual amount incurred. Where the employee's benefit is non-monetary, it shall be measured on the basis of fair value.

         ③ Social insurance premiums and housing accumulation funds such as health insurance premiums, work injury premiums,
birth insurance premiums, trade union funds and staff and education funds

         The company pays the medical insurance premiums, work injury insurance premiums, birth insurance premiums, etc. social
insurance premiums and housing accumulation funds for the staff and workers, as well as the union funds and the staff and workers
education funds according to the regulations, in the accounting period for which the staff and workers provide services, the
corresponding salary amount of the staff and workers, and confirms the corresponding liabilities, which are included in the current
profit and loss or related asset costs.

         ④ Short-term paid leave

         The company accumulates the salary of the employees who are absent from work with pay when the employees provide
service, thus increasing their future right of absence with pay. The company confirms the salary of the employee related to the
absence of non-cumulative salary during the actual absence accounting period.

         ⑤ Short-term profit share program

         If the profit-sharing plan meets the following conditions at the same time, the Company shall confirm the salary payable to the
staff and workers:

         A. The legal or presumptive obligation of the enterprise to pay the remuneration of its employees as a result of past matters;

         B. The amount of employee compensation obligations due to the profit sharing plan can be reliably estimated.


(2) Accounting of post-employment welfare

         The post-employment welfare of the Group is a defined plan, which means that the Company does not need to assume any
responsibility after making fixed contribution to an independent fund. The defined plan includes basic pension and unemployment
insurance. The contribution of the plan is recognized as liabilities and recorded in the profit and loss of this period or related assets
costs.




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(3) Accounting of dismiss welfare

       If the company provides termination benefits to employees, the employee compensation liabilities arising from the termination
benefits shall be recognized at the earliest of the following two and shall be included in the current profit and loss:

       ① An enterprise may not unilaterally withdraw the resignation benefits provided for by the dismissal plan or reduction
proposal;

       ② When the enterprise recognizes the costs or expenses related to the reorganization involving the payment of resignation
benefits.


(4) Accounting of other long-term staff welfare

Inapplicable


27. Anticipated liabilities

(1) Recognition standards of anticipated liabilities

When responsibilities occurred in connection to contingent issues, and all of the following conditions are satisfied, they are
recognized as expectable liability in the balance sheet:

① This responsibility is a current responsibility undertaken by the Company;

② Execution of this responsibility may cause financial benefit outflow from the Company;

③ Amount of the liability can be reliably measured.

(2) Measurement of anticipated liabilities

       Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility, and with
considerations to the relative risks, uncertainty, and periodic value of currency. On each balance sheet date, review the book value of
the estimated liabilities. Where there is conclusive evidence that the book value does not reflect the current best estimate, the book
value is adjusted to the current best estimate.


28. Revenue

The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.

    Specific revenue recognition method

       ① Construction contracts

       The subway screen door project of the subsidiary Zhichuang Technology Company and the curtain wall decoration projects of
the subsidiary Fangda Jianke Company are single construction contracts. The products produced by the company during the
performance of the contract have irreplaceable uses, and during the entire contract period The company has the right to collect
payment for the part of the contract that has been completed so far. The company recognizes revenue for this type of business within
a period of time based on the progress of the contract. The accounting method is as follows:

       When the contract between the company and the customer meets the following conditions at the same time, the company will
confirm the revenue and expenses of the construction contract on the balance sheet date according to the percentage of completion


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method when the customer obtains control of the relevant goods: all parties to the contract have approved the contract and promised
to perform it Respective obligations; the contract clarifies the rights and obligations of the parties to the contract related to the
transferred goods or the provision of labor; the contract has clear payment terms related to the transferred goods; the contract has
commercial substance, that is, the performance of the contract will change the company The risk, time distribution or amount of
future cash flow; the consideration that the company has the right to obtain when transferring goods to customers is likely to be
recovered.

      Contract costs are direct and indirect expenses occurred since the date when the contract is engaged till the completion day.
The competition percentage is determined by the share of the costs incurred in the total cost.

      Construction contracts completed in current term are recognized for income according to the actual total income of the
contract less income recognized in previous terms; meanwhile, the total costs of the contract less costs recognized in previous terms
are recognized as current contract costs. If the total contract cost is predicted to be greater than the predicted total income, the
predicted loss shall be recognized as current cost instantly.

      ② Sales product

      The company sells products and recognizes revenue when the customer obtains control of the relevant product. Revenue of
products for domestic sales is recognized when the Group delivers the products and receives the sales payment or obtains the
payment voucher; revenue for products for overseas sales is recognized at departure of the products.

      The credit period granted by the company to customers is consistent with industry practices, and there is no major financing
component.

      ③ Real estate sales

      The Company's real estate sales revenue is recognized when the control of the property is transferred to the customer. Based
on the terms of the sales contract and the legal provisions applicable to the contract, the control of the property can be transferred
within a certain period of time or at a certain point in time. Only if the goods produced by the company during the performance of the
contract have irreplaceable uses, and the company has the right to collect payment for the cumulative performance part that has been
completed during the entire contract period, the performance obligation has been completed during the contract period. The progress
is recognized as revenue within a period of time, and the progress of the completed performance obligations is determined in
accordance with the ratio of the contract costs actually incurred to complete the performance obligations to the estimated total cost of
the contract. Otherwise, the income is recognized when the customer obtains the physical ownership or legal ownership of the
completed property and the company has obtained the current right of collection and is likely to recover the consideration.

      The company’s existing property sales revenue is applicable to be recognized at a certain point in time, project is developed
and completed with the record for the completion acceptance, the handover procedure is completed or property is deemed accepted
by the customer as per the property sales contract, the payment is received or it is believed that the payment can be received, and the
cost can be measured reliably.
Accounting policies used in revenue recognition and measurement

      The company recognizes revenue based on the expected amount of consideration that is entitled to receive when the customer
obtains control of the relevant goods or services.


29. Government subsidy

      (1) Government subsidy

      Government subsidies are recognized when the following conditions are met:



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       (1) Requirements attached to government subsidies;

       (2) The company can receive government subsidies.

       (2) Government subsidy

       When a government subsidy is monetary capital, it is measured at the received or receivable amount. None monetary capital
are measured at fair value; if no reliable fair value available, recognized at RMB1.

       (3) Recognition of government subsidies

       The company's government subsidies are calculated using the gross method.

       Assets-related

       Government subsidies related to assets are obtained by the Company to purchase, build or formulate in other manners
long-term assets; or subsidies related to benefits. If the asset-related government subsidy is recognized as deferred gain, should be
recorded in gain and loss in the service life. Government subsidy measured at the nominal amount is accounted into current income
account. If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, the unallocated relevant
deferred income balance shall be transferred to the profit and loss of the current period of disposition of the assets.

       Gain-related government subsidy should be accounted as follows:

       The Company divides government subsidies into assets-related and earnings-related government subsidies. Gain-related
government subsidy should be accounted as follows:

       (1) Subsidy that will be used to compensate related future costs or losses should be recognized as deferred gain and recorded
in the gain and loss of the current report and offset related cost;

       (2) Subsidy that is used to compensate existing cost or loss should be recorded in the gain and loss of the current period or
offset related   cost.

       For government subsidies that include both asset-related and income-related parts, separate different parts for accounting
treatment; It is difficult to distinguish between the overall classification of government subsidies related to benefits.

       Government subsidy related to routine operations should be recorded in other gains or offset related cost. Government subsidy
not related to routine operations should be recorded in non-operating income or expense.

       ③ Policy preferential loan discount

       The policy-based preferential loan obtained has interest subsidy. If the government allocates the interest-subsidy funds to the
lending bank, the loan amount actually received will be used as the entry value of the loan, and the borrowing cost will be calculated
based on the loan principal and policy-based preferential interest rate.

       If the government allocates the interest-bearing funds directly to the Group, discount interest will offset the borrowing costs.

       (2) Government subsidy refund

       When a confirmed government subsidy needs to be returned, the book value of the asset is adjusted against the book value of
the relevant asset at initial recognition. If there is a related deferred income balance, the book balance of the related deferred income
is written off and the excess is credited to the current profit or loss; In other cases, it is directly included in the current profit and loss.


30. Differed income tax assets and differed income tax liabilities


       The Company uses the temporary difference between the book value of the assets and liabilities on the balance sheet day and
the tax base and the liabilities method to recognize the deferred income tax. 26. Deferred income tax assets and deferred income tax

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liabilities

       (1) Deferred income tax assets

       For deductible temporary discrepancies, deductible losses and tax offsets that can be carried forward for future years, the
impact on income tax is calculated at the estimated income tax rate for the transfer-back period and the impact is recognized as
deferred income tax assets, provided that the Company is likely to obtain future taxable income for deductible temporary
discrepancies, deductible losses and tax offsets.

       At the same time, the impact on income tax of deductible temporary discrepancies resulting from the initial recognition of
assets or liabilities in transactions or matters with the following characteristics is inconclusive as deferred income tax assets:

       A. The transaction is not a business combination;

       B. the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;

       In the event of temporary discrepancy of deductible investment related to subsidiaries, joint ventures and joint ventures, and
meeting the following two conditions, the amount of impact (talent) on income tax shall be deemed as deferred income tax assets:

       A. Temporary discrepancies are likely to be reversed in the foreseeable future;

       B. In the future, it is likely to obtain taxable income that can be used to offset the deductible temporary differences;

       On the balance sheet date, if there is conclusive evidence that sufficient taxable income is likely to be obtained in the future to
offset the deductible temporary differences, the deferred income tax assets that have not been recognized in the previous period are
recognized.

       On the balance sheet day, the Company re-examines the book value of the deferred income tax assets. If it is unlikely to have
adequate taxable proceeds to reduce the benefits of the deferred income tax assets, less the deferred income tax assets’ book value.
When there is adequate taxable proceeds, the lessened amount will be reversed.

       (2) Deferred income tax assets

       All provisional differences in taxable income of the Company shall be measured on the basis of the estimated income tax rate
for the period of transfer-back and shall be recognized as deferred income tax liabilities, except that:

       At the same time, the impact on income tax of deductible temporary discrepancies resulting the initial recognition of assets or
liabilities in transactions or matters with the following characteristics is inconclusive as deferred income tax Liabilities:

       A. Initial recognition of goodwill;

       B. Initial recognition of goodwill, or of assets or liabilities generated in transactions with the following features: the
transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;

       ② In the event of temporary discrepancy of deductible investment related to subsidiaries, Joint venture joint ventures, and
meeting the two conditions, the amount of impact (talent) on income tax shall be deemed as deferred income tax assets:

       A. The Company is able to control the time of temporary discrepancy transfers;

       B Temporary discrepancies are likely to be reversed in the foreseeable future;

       (3) Deferred income tax assets

       (1) Deferred income tax liabilities or assets associated with enterprise consolidation

       Temporary difference of taxable tax or deductible temporary difference generated by enterprise merger under non-same
control. When deferred income tax liability or deferred income tax asset is recognized, related deferred income tax expense (or


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income) is usually adjusted as recognized goodwill in enterprise merger.

      ② Amount of shares paid and accounted as owners' equity

      Except for the adjustment goodwill generated by mergers or deferred income tax related to transactions or events directly
accounted into the owners’ equity, income tax is accounted as income tax expense into the current gain/loss account. The effects of
temporary discrepancy on income tax include the following: Other integrated benefits such as fair value change of financial assets
available for sale, retroactive adjustment of accounting policy changes or retroactive restatement of accounting error correction
discrepancy to adjust the initial retained income, and mixed financial instruments including liabilities and equity.

      ③ Compensation for losses and tax deductions

      A. Compensable losses and tax deductions from the company's own operations

      Deductible losses refer to the losses calculated and determined in accordance with the provisions of the tax law that are
allowed to be made up with the taxable income of subsequent years. The uncovered losses (deductible losses) and tax deductions that
can be carried forward in accordance with the tax law are treated as deductible temporary differences. When it is expected that
sufficient taxable income is likely to be obtained in the future period when it is expected to be available to make up for losses or tax
deductions, the corresponding deferred income tax assets are recognized within the limit of the taxable income that is likely to be
obtained, while reducing the current period Income tax expense in the income statement.

      B. Compensable uncovered losses of the merged company due to business merger

      In a business combination, if the company obtains the deductible temporary difference of the purchased party and does not
meet the deferred income tax asset recognition conditions on the purchase date, it shall not be recognized. Within 12 months after the
purchase date, if new or further information is obtained indicating that the relevant conditions on the purchase date already exist, and
the economic benefits brought about by the temporary difference are expected to be deducted on the purchase date, confirm the
relevant delivery. Deferred income tax assets, while reducing goodwill, if the goodwill is not enough to offset, the difference is
recognized as the current profit and loss; except for the above circumstances, the deferred tax assets related to the business
combination are recognized and included in the current profit and loss.

      ④Temporary difference caused by merger offset

      If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and the
taxable basis of the taxpayer due to the offset of the unrealized internal sales gain or loss, the deferred income tax asset or the
deferred income tax liability is confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profit
statement is adjusted, with the exception of the deferred income tax related to the transaction or event directly included in the owner's
equity and the merger of the enterprise.

      ⑤ Share payment settled by equity

      If the tax law provides for allowable pre-tax deduction of expenses related to share payment, within the period for which the
cost and expense are recognized in accordance with the accounting standards, the Company shall calculate the tax basis and
temporary discrepancy based on the estimated pre-tax deduction amount at the end of the accounting period and confirm the relevant
deferred income tax if it meets the conditions for confirmation. Of these, the amount that can be deducted before tax in the future
exceeds the cost related to share payment recognized in accordance with the accounting standards, and the excess income tax shall be
directly included in the owner's equity.




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31. Leasing


(1) Accounting of operational leasing


      ① The Company as the leasor: Rentals from operational leasing are recognized as current gains on straight basis to the
periods of leasing. Where the lessor provides a lease-free period, the total rent shall be apportioned within the whole lease-free period
without deducting the lease-free period according to the straight line method or other reasonable method, and the rent-free period
shall be recognized as well as the corresponding liabilities. People If the charterer undertakes certain expenses, the Company shall
distribute the rent Expense balance deducted from the total rent income during the lease term.

      Initial direct expenses are recorded to current income account. In the event of an agreement or rent, the current profit and loss
shall be included in the actual occurrence.

      ② When the Company is the operating lessor, the rent received shall be recognized as income within the lease term by the
straight line method. Where the lessor provides a lease-free period, the total rent shall be apportioned within the whole lease-free
period without deducting the lease-free period according to the straight line method or other reasonable method, and the rent-free
period shall be recognized as well as the corresponding liabilities. If the charterer undertakes certain expenses, the Company shall
distribute the rent income balance deducted from the total rent income during the lease term.

Initial direct expenses are recorded to current income account. Larger amounts shall be capitalized and included in current profits and
losses in installments on the same basis as the confirmed rental income during the entire operating lease period. In the event of an
agreement or rent, the current profit and loss shall be included in the actual occurrence.


(2) Accounting of operational leasing


Inapplicable


32. Other significant accounting policies and estimates


      (1) Measurement at fair value

      Fair value is the price that can be obtained from selling an asset or paid for transferring liabilities in an orderly transaction on
the measurement date.

      The company measures the fair value of related assets or liabilities at the prices in the main market. If there is no major market,
the company measures the fair value of the relevant assets or liabilities at the most favorable market prices. The Group uses
assumptions that market participants use to maximize their economic benefits when pricing the asset or liability.

      The main market refers to the market with the highest transaction volume and activity of the related assets or liabilities. The
most favorable market means the market that can sell the related assets at the highest amount or transfer the related liabilities at the
lowest amount after considering the transaction cost and transportation cost.

      For financial assets or liabilities in an active market, The Company determines their fair value based on quotations in the
active market. If there is no active market, the Company uses evaluation techniques to determine the fair value.

      For the measurement of non-financial assets at fair value, the ability of market participants to use the assets for optimal
purposes to generate economic benefits, or the ability to sell the assets to other market participants that can be used for optimal
purposes to generate economic benefits.

      ① Valuation technology


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       The company adopts valuation techniques that are applicable in the current period and are supported by sufficient data and
other information. The valuation techniques used mainly include market method, income method and cost method. The company
uses a method consistent with one or more of the valuation techniques to measure fair value. If multiple valuation techniques are used
to measure fair value, the reasonableness of each valuation result shall be considered, and the fair value shall be selected as the most
representative of fair value under the current circumstances. The amount of value is regarded as fair value.

       The The Company equipment are applicable in the current circumstances and have sufficient available data and other
information to support the use of the relevant observable input values prioritized. Unobservable input values are used only when the
observable input value cannot be obtained or is not feasible. Observable input values are input values that can be obtained from
market data. The Group uses assumptions that market participants use to maximize their economic benefits when pricing the asset or
liability. Non-observable input values are input values that cannot be obtained from market data. The input value is obtained based on
the best information available on assumptions used by market participants in pricing the relevant asset or liability.

       ②Fair value hierarchy

       This company divides the input value used in fair value measurement into three levels, and first uses the first level input value,
then uses the second level input value, and finally uses the third level input value. First level: quotation of same assets or liabilities in
an active market (unadjusted) The second level input value is a directly or indirectly observable input value of the asset or liability in
addition to the first level input value. The input value of the third level is the unobservable input value of the related asset or liability.

       (2) Hedge accounting

       (1) Classification of inventories

       The company's hedge is a cash flow hedge.

       Cash flow hedging refers to the hedging of cash flow risk. The change in cash flow is derived from specific risks associated
with recognized assets or liabilities, expected transactions that are likely to occur, or with respect to the components of the
above-mentioned project and will affect the profits and losses of the enterprise.

       (2) Hedging tools and hedged projects

       Hedging means a financial instrument designated by the Company for the purpose of hedging, whose fair value or cash flow
variation is expected to offset the fair value or cash flow variation of the hedged item, including:

       ① Financial liabilities measured at fair value with variations accounted into current income account Check-out options can
only be used as a hedging tool if the option is hedged, including those embedded in a hybrid contract. Derivatives embedded in a
hybrid contract but not split cannot be used as separate hedging tools.

       ② Non-derivative financial assets or non-derivative financial liabilities that are measured at fair value and whose changes are
included in the current profit and loss, but designated as fair value and whose changes are included in the current profit and loss, and
their own credit risk changes caused by changes in fair value except for financial liabilities included in other comprehensive income.

       Own equity instruments are not financial assets or financial liabilities and cannot be used as hedging instruments.

       A hedged item refers to an item that exposes the company to the risk of changes in fair value or cash flow and is designated as
the hedged object and can be reliably measured. The company designates the following individual projects, project portfolios or their
components as hedged projects:

       ① Confirmed assets or liabilities.

       ② Confirmed commitments that have not yet been confirmed. Confirmed commitment refers to a legally binding agreement
to exchange a specific amount of resources at an agreed price on a specific date or period in the future.



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      ③ Expected transactions that are likely to occur. Anticipated transactions refer to transactions that have not yet been
committed but are expected to occur.

      ④ Net investment in overseas operations.

      The above-mentioned project components refer to the parts that are less than the overall fair value or cash flow changes of the
project. The company designates the following project components or their combinations as hedged items:

      ① The part of the change in fair value or cash flow (risk component) that is only caused by one or more specific risks in the
overall fair value or cash flow changes of the project. According to the assessment in a specific market environment, the risk
component should be able to be individually identified and reliably measured. The risk component also includes the part where the
fair value or cash flow of the hedged item changes only above or below a specific price or other variables.

      ② One or more selected contractual cash flows.

      ③ The component of the nominal amount of the project, that is, the specific part of the whole amount or quantity of the
project, may be a certain proportion of the whole project, or may be a certain level of the whole project. If a certain level includes
early repayment rights and the fair value of the early repayment rights is affected by changes in the risk of the hedge, the level shall
not be designated as the hedged item of the fair value hedge, but in the measurement of the hedged item except when the fair value
has included the influence of the prepayment right.

       (3) Evaluation of hedging relationship

      When the hedging relationship is initially specified, the Group officially specifies the related hedging relationships with
official documents recording the hedging relationships, risk management targets and hedging strategies. This document sets out the
hedging tools, hedged items, the nature of hedged risks, and the company's assessment of hedged effectiveness. Hedging means a
financial instrument designated by the Company for the purpose of hedging, whose fair value or cash flow variation is offset the fair
value or cash flow variation of the hedged item, including: Such hedges are continuously evaluated on and after the initial specified
date to meet the requirements for hedging validity.

      If the hedging instrument has expired, been sold, the contract is terminated or exercised (but the extension or replacement as
part of the hedging strategy is not treated as expired or contract termination), or the risk management objective changes, resulting in
hedging The relationship no longer meets the risk management objectives, or the economic relationship between the hedged item and
the hedging instrument no longer exists, or the impact of credit risk begins to dominate in the value changes caused by the economic
relationship between the hedged item and the hedging instrument, or when the hedge no longer meets the other conditions of the
hedge accounting method, the company terminates the use of hedge accounting.

      If the hedging relationship no longer meets the requirements for hedging effectiveness due to the hedging ratio, but the risk
management objective of the designated hedging relationship has not changed, the company shall rebalance the hedging relationship.

       (4) Revenue the of revenue recognition and measurement

      If the strict conditions of the hedging accounting method are satisfied, the following methods shall be applied:

      Cash flow hedging

      The part of hedging tool gains or losses that is valid for hedging is recognized as other comprehensive income as a cash flow
hedging reserve, and the part that is invalid for hedging (that is, other gains or losses after deducting other comprehensive income),
are counted Into the current profit and loss. The amount of cash flow hedging reserve is determined according to the lower of the
absolute amounts of the following two items: ①accumulated gains or losses of hedging instruments since the hedging. The amount
in the effective arbitrage is recognized by the accumulative gains or losses from the starting of arbitrage and accumulative changes to
the current value of future forecast cash flows from the start of arbitrage.



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       If the expected transaction of the hedged asset is subsequently recognized as a non-financial asset or non-financial liability, or
if the expected transaction of the non-financial asset or non-financial liability forms a defined commitment to the applicable fair
value hedge accounting, the amount of the cash flow hedge reserve originally recognized in the other consolidated income is
transferred out to account for the initial recognized amount of the asset or liability. For the remaining cash flow hedges, during the
same period when the expected cash flow to be hedged affects the profit and loss, if the expected sales occur, the cash flow hedge
reserve recognized in other comprehensive income is transferred out and included in the current profit and loss.

       (3) Repurchase of the Company’s shares

       (1) In the event of a reduction in the Company's share capital as approved by legal procedure, the Company shall reduce the
share capital by the total amount of the written-off shares, adjust the owner's equity by the difference between the price paid by the
purchased stocks (including transaction costs) and the total amount of the written-off shares, offset the capital reserve (share capital
premium), surplus reserve and undistributed profits in turn; A portion of a capital reserve (share capital premium) that is less than the
total face value and less than the total face value.

       (2) The total expenditure of the repurchase shares of the company, which is managed as an inventory share before they are
cancelled or transferred, is converted to the cost of the inventory shares.

       (3) Increase in the capital reserve (capital premium) at the time of transfer of an inventory unit, the portion of the transfer
income above the cost of the inventory unit; Lower than the inventory stock cost, the capital reserve (share capital premium), surplus
reserve, undistributed profits in turn.

       (4) Significant accounting judgment and estimate

       The Company continuously reviews significant accounting judgment and estimate adopted for the reasonable forecast of future
events based on its historical experience and other factors. Significant accounting judgment and assumptions that may lead to major
adjustment of the book value of assets and liabilities in the next accounting year are listed as follows:

       Classification of financial assets

       The major judgements involved in the classification of financial assets include the analysis of business model and contract
cash flow characteristics.

       The company determines the business mode of managing financial assets at the level of financial asset portfolio, taking into
account such factors as how to evaluate and report financial asset performance to key managers, the risks that affect financial asset
performance and how to manage it, and how to obtain remuneration for related business managers.

       When the company assesses whether the contractual cash flow of financial assets is consistent with the basic borrowing
arrangement, there are the following main judgments: whether the principal may change due to early repayment and other reasons
during the duration of the period or the amount of change; whether the interest Including the time value of money, credit risk, other
basic borrowing risks, and consideration of costs and profits. For example, does the amount paid in advance reflect only the unpaid
principal and the interest based on the unpaid principal, as well as the reasonable compensation paid for early termination of the
contract.

       Measurement of expected credit losses of accounts receivable

       The Company calculates the expected credit loss of accounts receivable through the risk exposure of accounts receivable
default and the expected credit loss rate, and determines the expected credit loss rate based on the default probability and the default
loss rate. When determining the expected credit loss rate, the company uses internal historical credit loss experience and other data,
combined with current conditions and forward-looking information to adjust the historical data. When considering forward-looking
information, the indicators used by the company include the risks of economic downturn, changes in the external market environment,
technological environment, and customer conditions. The company regularly monitors and reviews assumptions related to the

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calculation of expected credit losses.

       Deferred income tax assets

       If there is adequate taxable profit to deduct the loss, the deferred income tax assets should be recognized by all the unused tax
loss. This requires the management to make a lot of judgment to forecast the time and amount of future taxable profit and determine
the amount of the deferred tax assets based on the taxation strategy.

       Construction contracts

       The Group recognizes income based on the completion of individual construction contract. The management determines the
completion percentage based on the actual cost in the total budget and forecasts the contract income. The starting and completion
dates of construction contracts fall in different account periods. The Group will review and adjust contract income and cost
estimation in budgets (if the actual contract income is less than the estimate or actual contract cost, contract estimation loss provision
will be made).

       Estimate of fair value

       The Group uses fair value to measure investment real estate and needs to estimate the fair value of investment real estate at
least quarterly. This requires the management to reasonably estimate the fair value of the investment real estate with the help of
valuation experts.

       Development cost

       For property that has been handed over with income recognized, but whose public facilities have not been constructed or not
been completed, the management will estimate the development cost for the part that has not been started according to the budget to
reflect the operation result of the property sales.


33. Major changes in accounting policies and estimates

(1) Changes in accounting policies

√ Applicable □ Inapplicable

    Account policy changes and reasons                    Approval procedure                                  Remark

According to the relevant regulations of       This change in accounting policies was
the Ministry of Finance, the new revenue       reviewed and approved at the 22nd
standard will be implemented from January meeting of the 8th Board of Directors held
1, 2020                                        on April 16, 2020.

      As of January 1, 2020, the Company has implemented new revenue guidelines, listed the assigned goods or services entitled to
receive consideration as contractual assets, and has been recognized as accounts receivable upon acquisition of unconditional
collection rights; The non-leased portion of the advances is included in the contractual liability and the tax portion is included in the
other current liabilities.
      According to the regulations of the convergence between the old and new standards, the company adjusts the amount of
retained earnings at the beginning of the period and other related items in the financial statements based on the cumulative impact of
the first implementation of the new income standard, and does not adjust the information for the comparable period.
      For details of the impact of this change in accounting policies on the statement items, see "(3) The first implementation of the
new income standards and adjustments to the new lease standards from 2020 on the first implementation of the financial statements
related items at the beginning of the year" under this item.


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(2) Changes in major accounting estimates

√ Applicable □ Inapplicable

                                                                                                                   Effective   Remark
                          Account policy changes and reasons                               Approval procedure
                                                                                                                     time        s

In accordance with the requirements of the new financial instrument standards,            This change in
enterprises should assess whether the credit risk of relevant financial instruments has accounting estimates
changed significantly on each balance sheet date. The company uses the latest             was reviewed and
historical data to calculate the expected credit loss in 2020 according to the method     approved at the 22nd   January 1,
of calculating expected credit losses in 2019, which has changed significantly from       meeting of the 8th     2020
2019. In order to more objectively and truly reflect the financial status and operating Board of Directors
results of the company’s various businesses, Specially make changes in accounting        held on April 16,
estimates of accounts receivable and expected credit loss rate of contract assets.        2020.

The impact of this change in accounting estimates on the 2020 semi-annual financial statement items is: increase accounts receivable
by 15,632,429.65 yuan, increase contract assets by 79,360,828.79 yuan, reduce deferred income tax assets by 14,253,692.64 yuan,
and increase credit impairment losses (losses are marked with "-" No.) 94,993,258.44 yuan, increase deferred income tax expense by
14,253,692.64 yuan, increase net profit by 80,739,565.80 yuan.


(3) The first implementation of the new financial instruments guidelines, new income standards, new lease
standards, adjustments the first implementation of the financial statements at the beginning of the year

Applicable
Whether to adjust the balance sheet accounts at the beginning of the year
√ Yes □ No
Consolidated Balance Sheet
                                                                                                                               In RMB

               Item                   31 December 2019                      1 January 2020                       Adjustment

Current asset:

     Monetary capital                          1,209,811,978.95                      1,209,811,978.95

     Settlement provision

     Outgoing call loan

     Transactional financial
                                                   10,330,062.18                        10,330,062.18
assets

     Derivative financial
assets

     Notes receivable                            305,070,930.97                       305,070,930.97

     Account receivable                        1,956,191,307.07                       486,113,221.52                -1,470,078,085.55

     Receivable financing                           2,954,029.00                         2,954,029.00

     Prepayment                                    21,327,109.18                        21,327,109.18




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     Insurance receivable

     Reinsurance receivable

     Provisions of
Reinsurance contracts
receivable

     Other receivables          139,947,655.35      139,947,655.35

         Including: interest
receivable

                 Dividend
receivable

     Repurchasing of
financial assets

     Inventory                  733,711,143.46       733,711,143.46

     Contract assets                               1,470,078,085.55                1,470,078,085.55

     Assets held for sales

     Non-current assets due
in 1 year

     Other current assets       323,765,585.90      323,765,585.90

Total current assets           4,703,109,802.06    4,703,109,802.06

Non-current assets:

     Loan and advancement
provided

     Debt investment

     Other debt investment

     Long-term receivables

     Long-term share equity
                                 57,222,240.83        57,222,240.83
investment

     Investment in other
                                 20,660,181.44        20,660,181.44
equity tools

     Other non-current
                                  5,009,728.02         5,009,728.02
financial assets

     Investment real estate    5,522,391,984.11    5,522,391,984.11

     Fixed assets               477,332,830.92      477,332,830.92

     Construction in process    129,988,982.86      129,988,982.86

     Productive biological
assets

     Gas & petrol


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     Use right assets

     Intangible assets             78,322,265.05        78,322,265.05

     R&D expense

     Goodwill

     Long-term amortizable
                                    3,875,198.12         3,875,198.12
expenses

     Deferred income tax
                                  343,349,564.70      343,349,564.70
assets

     Other non-current assets      28,701,802.00        28,701,802.00

Total of non-current assets     6,666,854,778.05     6,666,854,778.05

Total of assets                 11,369,964,580.11   11,369,964,580.11

Current liabilities

     Short-term loans             724,618,197.34      724,618,197.34

     Loans from Central
Bank

     Call loan received

     Transactional financial
liabilities

     Derivative financial
                                       96,767.62            96,767.62
liabilities

     Notes payable                578,816,027.44      578,816,027.44

     Account payable            1,190,773,300.24     1,190,773,300.24

     Prepayment received          136,340,104.73         1,332,457.45                 -135,007,647.28

     Contract liabilities                             123,981,276.51                   123,981,276.51

     Selling of repurchased
financial assets

     Deposit received and
held for others

     Entrusted trading of
securities

     Entrusted selling of
securities

     Employees' wage
                                   55,847,134.20        55,847,134.20
payable

     Taxes payable                 17,848,987.68        17,848,987.68

     Other payables               701,432,408.28      701,432,408.28




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        Including: interest
payable

                Dividend
payable

     Fees and commissions
payable

     Reinsurance fee payable

     Liabilities held for sales

     Non-current liabilities
                                   922,346,563.72      922,346,563.72
due in 1 year

     Other current liabilities     181,694,574.47      192,720,945.24                    11,026,370.77

Total current liabilities         4,509,814,065.72    4,509,814,065.72

Non-current liabilities:

     Insurance contract
provision

     Long-term loans               546,501,491.56      546,501,491.56

     Bond payable

        Including: preferred
stock

                Perpetual
bond

     Lease liabilities

     Long-term payable

     Long-term employees’
wage payable

     Anticipated liabilities         7,793,527.16         7,793,527.16

     Deferred earning               10,817,247.40        10,817,247.40

     Deferred income tax
                                  1,063,833,159.00    1,063,833,159.00
liabilities

     Other non-current
liabilities

Total of non-current
                                  1,628,945,425.12    1,628,945,425.12
liabilities

Total liabilities                 6,138,759,490.84    6,138,759,490.84

Owner’s equity:

     Share capital                1,123,384,189.00    1,123,384,189.00

     Other equity instruments


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         Including: preferred
stock

                 Perpetual
bond

     Capital reserves                           1,454,191.59              1,454,191.59

     Less: Shares in stock

     Other miscellaneous
                                                 -475,409.25               -475,409.25
income

     Special reserves

     Surplus reserve                          159,805,930.34           159,805,930.34

     Common risk provisions

     Undistributed profit                    3,898,626,177.99         3,898,626,177.99

Total of owner’s equity
                                             5,182,795,079.67         5,182,795,079.67
belong to the parent company

     Minor shareholders’
                                               48,410,009.60             48,410,009.60
equity

Total of owners’ equity                     5,231,205,089.27         5,231,205,089.27

Total of liabilities and
                                            11,369,964,580.11        11,369,964,580.11
owner’s interest



Balance Sheet of the Parent Company
                                                                                                                In RMB

              Item                    31 December 2019          1 January 2020                   Adjustment

Current asset:

     Monetary capital                         175,591,953.63           175,591,953.63

     Transactional financial
assets

     Derivative financial
assets

     Notes receivable

     Account receivable                           297,813.76                297,813.76

     Receivable financing

     Prepayment                                   250,205.32                250,205.32

     Other receivables                       1,973,381,342.74         1,973,381,342.74

         Including: interest
receivable




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                  Dividend
receivable

     Inventory

     Contract assets

     Assets held for sales

     Non-current assets due
in 1 year

     Other current assets            877,430.41           877,430.41

Total current assets            2,150,398,745.86    2,150,398,745.86

Non-current assets:

     Debt investment

     Other debt investment

     Long-term receivables

     Long-term share equity
                                 963,508,253.00      963,508,253.00
investment

     Investment in other
                                  18,604,010.22        18,604,010.22
equity tools

     Other non-current
                                  48,831,242.35        48,831,242.35
financial assets

     Investment real estate      295,355,002.00      295,355,002.00

     Fixed assets                 67,361,529.52        67,361,529.52

     Construction in process

     Productive biological
assets

     Gas & petrol

     Use right assets

     Intangible assets             1,824,589.22         1,824,589.22

     R&D expense

     Goodwill

     Long-term amortizable
                                     934,669.73           934,669.73
expenses

     Deferred income tax
                                  44,408,630.81        44,408,630.81
assets

     Other non-current assets

Total of non-current assets     1,440,827,926.85    1,440,827,926.85

Total of assets                 3,591,226,672.71    3,591,226,672.71



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Current liabilities

     Short-term loans             300,442,988.19     300,442,988.19

     Transactional financial
liabilities

     Derivative financial
liabilities

     Notes payable

     Account payable                 606,941.85           606,941.85

     Prepayment received             746,761.55           746,761.55

     Contract liabilities

     Employees' wage
                                    3,215,013.16        3,215,013.16
payable

     Taxes payable                   312,647.89           312,647.89

     Other payables               109,837,934.17     109,837,934.17

        Including: interest
payable

                Dividend
payable

     Liabilities held for sales

     Non-current liabilities
                                  520,872,206.95     520,872,206.95
due in 1 year

     Other current liabilities

Total current liabilities         936,034,493.76     936,034,493.76

Non-current liabilities:

     Long-term loans               70,000,000.00       70,000,000.00

     Bond payable

        Including: preferred
stock

                Perpetual
bond

     Lease liabilities

     Long-term payable

     Long-term employees’
wage payable

     Anticipated liabilities

     Deferred earning



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      Deferred income tax
                                                   64,351,075.92                       64,351,075.92
liabilities

      Other non-current
liabilities

Total of non-current
                                                  134,351,075.92                     134,351,075.92
liabilities

Total liabilities                               1,070,385,569.68                    1,070,385,569.68

Owner’s equity:

      Share capital                             1,123,384,189.00                    1,123,384,189.00

      Other equity instruments

         Including: preferred
stock

                 Perpetual
bond

      Capital reserves                                 360,835.52                         360,835.52

      Less: Shares in stock

      Other miscellaneous
                                                     1,287,629.38                       1,287,629.38
income

      Special reserves

      Surplus reserve                             159,805,930.34                     159,805,930.34

      Undistributed profit                      1,236,002,518.79                    1,236,002,518.79

Total of owners’ equity                        2,520,841,103.03                    2,520,841,103.03

Total of liabilities and
                                                3,591,226,672.71                    3,591,226,672.71
owner’s interest

About the adjustment
As of January 1, 2020, the Company has implemented new revenue guidelines, listed the assigned goods or services entitled to
receive consideration as contractual assets, and has been recognized as accounts receivable upon acquisition of unconditional
collection rights; The non-leased portion of the advances is included in the contractual liability and the tax portion is included in the
other current liabilities.


(4) Description of the 2020 first implementation of the new Income criteria, new lease standard
retrospective adjustment of the previous period comparison data

□ Applicable √ Inapplicable




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VI. Taxation

1. Major taxes and tax rates


                     Tax                                           Tax basis                                  Tax rate

VAT                                             Taxable income                               3%, 5%, 6%, 9%, 13%

City maintenance and construction tax           Taxable turnover                             1%, 5%, 7%

Enterprise income tax                           Taxable income                               See the following table

Education surtax                                Taxable turnover                             3%

Local education surtax                          Taxable turnover                             2%

Tax rates applicable for different tax payers

                             Tax payer                                                          Income tax rate

The Company                                                            25%

Shenzhen Fangda Jianke Co., Ltd. (hereinafter Fangda Jianke)           15% (for details see 6 2 (1))

Fangda Zhichuang Technology Co., Ltd, (Fangda Zhichuang)               15% (for details see 6 2 (2))

Fangda New Material (Jiangxi) Co., Ltd. (hereinafter Fangda
                                                                       15% (for details see 6 2 (3))
New Material)

Dongguan Fangda New Material Co., Ltd. (hereinafter
                                                                       15% (for details see 6 2 (4))
Dongguan New Material)

Chengdu Fangda Construction Technology Co., Ltd. (hereinafter
                                                                       15% (for details see 6 2 (5))
Chengdu Fangda)

Shenzhen Fangda Property Development Co., Ltd. (hereinafter
                                                                       25%
Fangda Property Development)

Shenzhen Fangda New Energy Co., Ltd. (hereinafter Fangda
                                                                       25%
New Energy)

Shenzhen Fangda Property Development Co., Ltd. (hereinafter
                                                                       25%
Fangda Property Development)

Jiangxi Fangda Property Development Co., Ltd. (hereinafter
                                                                       25%
Jiangxi Property Development)

Pingxiang Fangda Luxin New Energy Co., Ltd. (hereinafter
                                                                       25% (for details see 6 2 (6))
Luxin New Energy)

Nanchang Xinjian Fangda New Energy Co., Ltd. (hereinafter
                                                                       25% (for details see 6 2 (7))
Xinjian New Energy)

Dongguan Fangda New Energy Co., Ltd. (hereinafter Dongguan
                                                                       25% (for details see 6 2 (8))
New Energy)

Shenzhen QIanhai Kechuangyuan Software Co., Lt.d (hereinafter
                                                                       25% (for details see 6 2 (9))
Kechuangyuan Software)

Fangda Zhichuang Technology (Hong Kong) Co., Ltd,                      16.50%


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(Zhichuang Hong Kong)

Shihui International Holding Co., Ltd. (hereinafter Shihui
                                                                   16.50%
International)

Shenzhen Hongjun Investment Co., Ltd.                              25%

Fangda Australia Pty Ltd (hereinafter Jianke Australia)            30%

Shanghai Fangda Jingling Technology Co., Ltd. (hereinafter
                                                                   25%
Jingling Technology)

Shenzhen Fangda Cloud Rail Technology Co., Ltd. (hereinafter
                                                                   25%
Fangda Cloud Rail)

Shanghai Fangda Jianzhi Technology Co., Ltd. (hereinafter
                                                                   25%
Shanghai Fangda Jianzhi)

Shenzhen Zhongrong Litai Investment Co. Ltd. (Zhongrong
                                                                   25%
Litai)

Chengdu Fangda Curtain Wall Technology Co., Ltd. (hereinafter
                                                                   25%
Chengdu Curtain Wall)

Fangda Southeast Asia Co., Ltd. (hereinafter Fangda Southeast
                                                                   20%
Asia)

Fangda Jianke (Hong Kong) Co., Ltd. (hereinafter Jianke Hong
                                                                   16.50%
Kong)


2. Tax preference

     (1) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation,
Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau on 19.06.15, Fangda Jianke was
entitled to enjoy a tax preference of enterprise income tax of 15% for three years (2018-2017) since the qualifications were awarded.
     (2) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation,
Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau on 19.06.15, Fangda Zhichuang
was entitled to enjoy a tax preference of enterprise income tax of 15% for three years (2018-2017) since the qualifications were
awarded.
     (3) According to the Certification of High-tech Enterprise issued by Jiangxi Ministry of Science and Technology, Jiangxi
Ministry of Finance, Jiangxi National Tax Bureau, and Jiangxi Local Tax Bureau on 13.08.18, Fangda New Material was entitled to
enjoy a tax preference of enterprise income tax of 15% for three years (2018-2014) since the qualifications were awarded.
     (4) According to the Certification of High-tech Enterprise issued by Guangdong Ministry of Science and Technology,
Guangdong Ministry of Finance, Guangdong National Tax Bureau, and Guangdong Local Tax Bureau on December 2, 2019,
Dongguan New Material was entitled to enjoy a tax preference of enterprise income tax of 15% for three years (2019-2021) since the
qualifications were awarded.
     (5) On November 7, 2014, Chengdu Fangda was certified by Sichuan Xinjin National Tax Bureau as an encourage industry
company in the west China (Xin Jin National Tax Doc. [zzy024]) and started to enjoy a tax rate of 15%.
         On Monday, December 04, 2017, the subsidiary Chengdu Fangda Construction Technology Co., Ltd. obtained the ―High-tech
Enterprise Certificate‖ jointly issued by Sichuan Science and Technology Department, Sichuan Provincial Department of Finance,
Sichuan Provincial State Taxation Bureau and Sichuan Provincial Local Taxation Bureau, within three years after obtaining the



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qualification of high-tech enterprises (2017 to 2019), the income tax is levied Resume at 15%.
     (6) On 02.03.16, according to the document issued by Luxi National Tax Bureau, the PV power generation project undertaken
by Pingxiang Fangda Luxin New Energy Co., Ltd, became the infrastructure project supported by the central government. The
company enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, the company entered
the exemption period.
     (7) On 02.06.16, according to the document issued by Nanchang Xinjian District National Tax Bureau, the PV power generation
project undertaken by subsidiary Xinjian New Energy Company, became the infrastructure project supported by the central
government. The company enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, the
company entered the exemption period.
     (8) On November 2, 2015, Dongguan New Energy was certified by Dongguan National Tax Bureau Songshanhu branch as the
national supported public infrastructure project according to the Song Shan Hu Tax Doc [2015] 3305. The company is exempted
from enterprise income tax for three years and halfly exempted for another three years. In 2015, the company entered the exemption
period.
     (9) On 10.03.17, according to the registration to Shenzhen National Tax Bureau, subsidiary Kechuangyuan Software became a
newly established software and integrated circuit designing company and can enjoy the two-year full exemption and three-year
half-exemption of the enterprise income tax from the first year that the company records profit. Kexunda started making profits in
2016 and therefore starts to enjoy the exemption.


VII. Notes to the consolidated financial statements

1. Monetary capital

                                                                                                                              In RMB

                     Item                                 Closing balance                              Opening balance

Inventory cash:                                                                 9,534.72                                    4,244.86

Bank deposits                                                            695,944,047.54                              755,440,390.76

Other monetary capital                                                   360,965,672.10                              454,367,343.33

Total                                                                  1,056,919,254.36                             1,209,811,978.95

  Including: total amount deposited in
                                                                          35,541,487.15                                54,640,438.33
overseas

           The total amount of money that
has restrictions on use due to mortgage,                                 444,757,864.32                              484,542,076.05
pledge or freezing

Other note
      (1) Restricted funds in monetary funds are 444,757,864.32 yuan; among them, restricted funds used in bank deposits are
91,330,153.91 yuan, which are labor insurance accounts, migrant workers' deposits, and litigation frozen funds, etc.; restricted funds
in other monetary funds are 353,427,710.41 yuan, mainly for draft deposits, interim guarantee deposits, guarantee deposits for
issuance of letters of guarantee, etc. In addition, there are no other funds in the monetary funds at the end of the period that have
restrictions on use and potential recovery risks due to mortgages, pledges or freezing.
      ② In the preparation of the cash flow statement, the above-mentioned deposits and other restricted deposits are not used as cash
and cash equivalents.
      (3) At the end of the period, the total amount of funds deposited overseas by the Group was RMB 35,541,487.15, of which no
repatriation was restricted.




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2. Transactional financial assets

                                                                                                                                In RMB

                    Item                                   Closing balance                              Opening balance

Financial assets measured at fair value
with variations accounted into current                                     18,005,336.72                                10,330,062.18
income account

Including: Investment of financial products                                18,005,336.72                                10,330,062.18

Total                                                                      18,005,336.72                                10,330,062.18


3. Derivative financial assets

                                                                                                                                In RMB

                    Item                                   Closing balance                              Opening balance

Futures hedging contract                                                     1,760,150.00

Forward foreign exchange contract                                                 55,526.34

Total                                                                        1,815,676.34


4. Notes receivable

(1) Classification of notes receivable

                                                                                                                                In RMB

                    Item                                   Closing balance                              Opening balance

Bank acceptance                                                              6,450,000.00                               45,540,691.10

Commercial acceptance                                                     158,076,921.14                               259,530,239.87

Total                                                                     164,526,921.14                               305,070,930.97

If the provision for bad debts of bills receivable is made in accordance with the general model of expected credit losses, please refer
to the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable


(2) The Group has no endorsed or discounted immature receivable notes at the end of the period.

                                                                                                                                In RMB

                    Item                                De-recognized amount                       Not de-recognized amount

Bank acceptance                                                            12,540,000.00                                  4,650,000.00

Commercial acceptance                                                                                                   32,157,182.46

Total                                                                      12,540,000.00                                36,807,182.46




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5. Account receivable

(1) Account receivable disclosed by categories

                                                                                                                                         In RMB

                                             Closing balance                                             Opening balance

                        Remaining book                                                 Remaining book
                                                  Bad debt provision                                         Bad debt provision
         Type                   value                                      Book             value
                                                                                                                                     Book value
                                      Proportio              Provision     value                 Proportio               Provision
                       Amount                     Amount                             Amount                  Amount
                                         n                     rate                                  n                     rate

Account receivable
for which bad debt     97,737,8                   97,737,8                           97,344,44               97,344,44
                                       13.22%                100.00%          0.00                  14.19%               100.00%           0.00
provision is made by      98.97                      98.97                                0.13                    0.13
group

Including:

                       55,266,6                   55,266,6                           54,873,22               54,873,22
1. Customer 1                            7.47%               100.00%          0.00                  8.00%                100.00%           0.00
                          82.05                      82.05                                3.21                    3.21

                       21,739,3                   21,739,3                           21,739,38               21,739,38
2. Customer 2                            2.94%               100.00%          0.00                  3.17%                100.00%           0.00
                          81.96                      81.96                                1.96                    1.96

                       13,461,8                   13,461,8                           13,461,83               13,461,83
3. Customer 3                            1.82%               100.00%          0.00                  1.96%                100.00%           0.00
                          34.96                      34.96                                4.96                    4.96

                       7,270,00                   7,270,00                           7,270,000               7,270,000
4. Customer 4                            0.98%               100.00%          0.00                  1.06%                100.00%           0.00
                               0.00                   0.00                                 .00                     .00

Account receivable
for which bad debt     641,663,                   77,245,5               564,418,0 588,639,3                 102,526,1               486,113,22
                                       86.78%                 12.04%                                85.81%                 17.42%
provision is made by     604.40                      85.81                   18.59      29.05                   07.53                      1.52
group

Including:

Portfolio 1:
                       324,936,                   49,004,5               275,931,9 440,597,1                 91,306,21               349,290,91
Engineering                            43.95%                 15.08%                                64.23%                 20.72%
                         566.69                      72.37                   94.32      27.89                     5.77                     2.12
operations section

Portfolio 2: Real
                       236,737,                   25,876,8               210,860,5 78,982,27                 8,857,718               70,124,555.
estate business                        32.02%                 10.93%                                11.51%                 11.21%
                         347.31                      01.02                   46.29        4.43                     .82                       61
payments

Combination 3:
                       79,989,6                   2,364,21               77,625,47 69,059,92                 2,362,172               66,697,753.
Other business                         10.82%                   2.96%                               10.07%                  3.42%
                          90.40                       2.42                    7.98        6.73                     .94                       79
models

                       739,401,                   174,983,               564,418,0 685,983,7                 199,870,5               486,113,22
Total                                 100.00%                 11.54%                             100.00%                   29.14%
                         503.37                     484.78                   18.59      69.18                   47.66                      1.52

Separate bad debt provision:


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                                                                                                                                     In RMB

                                                                         Closing balance
Name
                          Remaining book value        Bad debt provision           Provision rate             Reason

                                                                                                              Customer credit status
Customer 1                            55,266,682.05             55,266,682.05                        100.00% deteriorates and is not
                                                                                                              expected to be recovered

                                                                                                              Customer credit status
Customer 2                            21,739,381.96             21,739,381.96                        100.00% deteriorates and is not
                                                                                                              expected to be recovered

                                                                                                              Customer credit status
Customer 3                            13,461,834.96             13,461,834.96                        100.00% deteriorates and is not
                                                                                                              expected to be recovered

                                                                                                              Customer credit status
Customer 4                             7,270,000.00                 7,270,000.00                     100.00% deteriorates and is not
                                                                                                              expected to be recovered

Total                                 97,737,898.97             97,737,898.97 --                              --

Provision for bad debts by combination:
                                                                                                                                     In RMB

                                                                            Closing balance
               Name
                                      Remaining book value                 Bad debt provision                      Provision rate

Portfolio 1: Engineering operations section

Less than 1 year                                 173,588,505.64                          3,404,132.87                                1.96%

1-2 years                                         55,099,062.50                          3,120,864.88                                5.66%

2-3 years                                         36,449,159.27                          4,649,273.54                               12.76%

3-4 years                                         18,728,872.46                          3,700,936.93                               19.76%

4-5 years                                         12,212,812.57                          5,271,209.90                               43.16%

Over 5 years                                      28,858,154.25                        28,858,154.25                                100.00%

Subtotal                                         324,936,566.69                        49,004,572.37                                15.08%

Portfolio 2: Real estate business payments

Less than 1 year                                  51,772,537.76                            517,725.38                                1.00%

1-2 years                                         23,856,457.95                          1,192,822.90                                5.00%

2-3 years                                                    0.00                                   0.00                             5.00%

3-4 years                                        161,108,351.60                        24,166,252.74                                15.00%

Subtotal                                         236,737,347.31                        25,876,801.02                                10.93%

Combination 3: Other business models

Less than 1 year                                  40,149,012.88                            293,169.26                                0.73%



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1-2 years                                            29,134,316.13                         612,198.92                          2.10%

2-3 years                                             9,184,137.16                         773,414.30                          8.42%

3-4 years                                             1,112,151.28                         275,591.09                         24.78%

4-5 years                                                 1,730.26                           1,496.16                         86.47%

Over 5 years                                            408,342.69                         408,342.69                        100.00%

Subtotal                                             79,989,690.40                       2,364,212.42                          2.96%

Total                                              641,663,604.40                       77,245,585.81 --

If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
Account age
                                                                                                                              In RMB

                                Age                                                           Closing balance

Within 1 year (inclusive)                                                                                             266,062,907.35

1-2 years                                                                                                             111,391,117.14

2-3 years                                                                                                              57,083,311.33

Over 3 years                                                                                                          304,864,167.55

   3-4 years                                                                                                          190,503,409.57

   4-5 years                                                                                                           37,247,531.59

   Over 5 years                                                                                                        77,113,226.39

Total                                                                                                                 739,401,503.37

The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.

                                                    Bad debt provision
                    Balance of accounts                                                                         Whether there is a
   Customer                                     corresponding to accounts               Reason of the age
                  receivable of over 3 years                                                                     risk of recovery
                                                         receivable
                                                                                    Customer credit status
  Customer 1           53,281,747.13                  53,281,747.13                                                    Yes
                                                                                          deteriorates
                                                                                    Customer credit status
  Customer 2           13,461,834.96                  13,461,834.96                                                    Yes
                                                                                          deteriorates
                                                                                    Customer credit status
  Customer 3           17,374,148.42                  17,033,021.55                                                    Yes
                                                                                          deteriorates
     Total              84,117,730.51                 83,776,603.63


(2) Bad debt provision made, returned or recovered in the period

Bad debt provision made in the period:
                                                                                                                              In RMB


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                                                                      Change in the period
        Type          Opening balance                        Written-back or                                               Closing balance
                                             Provision                                 Canceled             Others
                                                                   recovered

Portfolio 1:
Engineering            188,650,655.90                          41,908,184.55                                                146,742,471.35
operations section

Portfolio 2: Real
estate business          8,857,718.82        17,019,082.20                                                                   25,876,801.02
payments

Combination 3:
Other business           2,362,172.94             2,039.48                                                                     2,364,212.42
models

Total                  199,870,547.66        17,021,121.68     41,908,184.55                                                174,983,484.79

The reversal of the provision for bad debts of construction business accounts in this period was mainly due to the change in the
expected credit loss rate of accounts receivable in this period.


(3) Balance of top 5 accounts receivable at the end of the period

                                                                                                                                     In RMB

                                Closing balance of accounts                                               Balance of bad debt provision at
           Entity                                                              Percentage (%)
                                           receivable                                                           the end of the period

Customer 1                                       159,590,068.80                                 21.58%                       21,711,203.32

Customer 2                                        55,266,682.05                                   7.47%                      55,266,682.05

Customer 3                                        23,791,352.80                                   3.22%                        3,568,702.92

Customer 4                                        23,252,449.78                                   3.14%                          456,000.52

Customer 5                                        22,475,765.58                                   3.04%                        1,916,810.97

Total                                            284,376,319.01                                 38.45%


(4) Receivables derecognized due to transfer of financial assets


            Item       Transfer method of financial       De-recognized amount              Gain or loss related to the de-recognition
                                  assets

         Customer 1              Factoring                                3,368,921.78                                     -202,198.85

         Customer 2              Factoring                                     490,899.13                                   -19,989.14

         Customer 3              Factoring                                4,819,475.00                                     -190,919.60

         Customer 4              Factoring                               10,592,527.22                                     -440,331.67

         Customer 5              Factoring                                5,130,984.12                                     -245,014.66

         Customer 6              Factoring                                1,231,561.03                                      -63,617.65


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        Customer 7              Factoring                                  8,289,670.58                                   -404,847.23

            Total                                                         33,924,038.86                               -1,566,918.80

Note: In the current period, the company handled the factoring of accounts receivable without recourse, and the factoring amount was
RMB 33,924,038.86. At the same time, the book balance of accounts receivable was derecognized at RMB 33,924,038.86.


6. Receivable financing

                                                                                                                                   In RMB

                     Item                                  Closing balance                                  Opening balance

Notes receivable                                                                 300,000.00                                   2,954,029.00

                     Total                                                       300,000.00                                   2,954,029.00

Increase or decrease in the current period of receivables financing and changes in fair value
□ Applicable √ Inapplicable
If the provision for financing impairment of receivables is accrued in accordance with the general expected credit loss model, please
refer to the disclosure of other receivables to disclose the relevant information of the impairment provision:
□ Applicable √ Inapplicable


7. Prepayment

(1) Account age of prepayments

                                                                                                                                   In RMB

                                               Closing balance                                          Opening balance
            Age
                                    Amount                       Proportion                   Amount                  Proportion

Less than 1 year                        23,861,139.29                       68.33%               14,025,617.54                     65.77%

1-2 years                                7,902,770.87                       22.63%                  5,895,327.15                   27.64%

2-3 years                                   543,969.67                        1.56%                  473,487.72                     2.22%

Over 3 years                             2,611,509.00                         7.48%                  932,676.77                     4.37%

Total                                   34,919,388.83                --                          21,327,109.18              --

Explanation of non-settlement of significant prepayments with an accounting age of more than 1 year:

                    Entity                     Closing balance of book                        Age                         Reason
                                                         value
 Guangdong Xingfa Aluminium Co., Ltd.               6,244,661.31                            1-2 years                 Not mature


(2) Balance of top 5 prepayments at the end of the period

The total of top5 prepayments in terms of the prepaid entities in the period is RMB15,219,611.63, accounting for 43.58% of the total
prepayments at the end of the period.




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8. Other receivables

                                                                                                                                   In RMB

                      Item                                    Closing balance                               Opening balance

Other receivables                                                            158,674,891.12                             139,947,655.35

Total                                                                        158,674,891.12                             139,947,655.35


(1) Other receivables

1) Other receivables are disclosed by nature

                                                                                                                                   In RMB

                  By nature                           Closing balance of book value                 Opening balance of book value

Deposit                                                                      116,035,799.08                             103,782,569.80

Construction borrowing and advanced
                                                                              32,408,043.13                               34,052,644.05
payment

Staff borrowing and petty cash                                                  2,009,402.33                                  1,717,094.83

Receivable refund of VAT                                                        2,124,028.86                                   548,129.42

Debt by Luo Huichi                                                            12,992,291.48                               12,992,291.48

Others                                                                        19,411,431.41                               12,502,878.08

Total                                                                       184,980,996.29                              165,595,607.66


2) Method of bad debt provision

                                                                                                                                   In RMB

                                   First stage               Second stage                   Third stage

                                Expected credit       Expected credit loss for the Expected credit loss for the
   Bad debt provision                                                                                                    Total
                              losses in the next 12    entire duration (no credit      entire duration (credit
                                    months                   impairment)             impairment has occurred)

Balance on January 01,
                                      2,113,622.44                       6,415.10                 23,527,914.77           25,647,952.31
2020

Balance on January 01,
2020 in the current                  ——                        ——                          ——                      ——
period

-- transferred to the third
                                                                           -150.00                        150.00
stage

Provision                               570,976.94                       3,466.09                     337,040.41               911,483.44

Transferred back in the
                                         67,206.05                          174.00                    185,950.53               253,330.58
current period


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Balance on June 30, 2020                2,617,393.33                    9,707.19                  23,679,004.65           26,306,105.17

Changes in book balances with significant changes in the current period
□ Applicable √ Inapplicable
Account age
                                                                                                                                 In RMB

                                  Age                                                            Closing balance

Within 1 year (inclusive)                                                                                                 54,570,812.26

1-2 years                                                                                                                 81,932,549.03

2-3 years                                                                                                                 23,957,588.91

Over 3 years                                                                                                              24,520,046.09

   3-4 years                                                                                                               3,569,009.30

   4-5 years                                                                                                              17,047,699.71

   Over 5 years                                                                                                            3,903,337.08

Total                                                                                                                    184,980,996.29


3) Bad debt provision made, returned or recovered in the period

Bad debt provision made in the period:
                                                                                                                                 In RMB

                                                                     Change in the period
        Type        Opening balance                          Written-back or                                           Closing balance
                                              Provision                               Canceled           Others
                                                                recovered

Other receivables
and bad debt            25,647,952.31           911,483.44          253,330.58                                            26,306,105.17
provision

Total                   25,647,952.31           911,483.44          253,330.58                                            26,306,105.17


4) Balance of top 5 other receivables at the end of the period

                                                                                                                                 In RMB

                                                                                                                    Balance of bad debt
        Entity                  By nature         Closing balance              Age               Percentage (%)     provision at the end
                                                                                                                       of the period

Shenzhen Yikang        Deposit/advancemen
                                                       70,062,675.83 1-2 years                             37.88%          1,043,933.87
Real Estate Co. Ltd. t of service fee

Bangshen
Electronics            Deposit                         20,000,000.00 2-3 years                             10.81%            298,000.00
(Shenzhen) Co., Ltd.



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Luo Huichi              Debt by SOZN                    12,992,291.48 4-5 years                                7.02%            12,992,291.48

China Merchants
Futures Brokerage       Futures margin                  11,695,766.00 Less than 1 year                         6.32%               174,266.91
Co., Ltd.

Shenzhen Henggang
                        Deposit                          8,044,000.00 1-2 years                                4.35%               119,855.60
Dakang Co., Ltd.

Total                              --               122,794,733.31                --                          66.38%            14,628,347.86


5) Items involving government subsidies:

                                                                                                                                        In RMB

                                                                                                                   Estimated time, amount
            Entity           Governmental subsidy             Closing balance                 Closing age
                                                                                                                        and basis of receipt

                                                                                                                  It can be recovered in
                                                                                                                  time after receiving the
Shenzhen Qianhai
                            VAT rebated                              2,124,028.86 Less than 1 year                tax refund (fee) approval
Taxation Bureau
                                                                                                                  notice from the tax
                                                                                                                  bureau


9. Inventories

Whether the Company needs to comply with disclosure requirements of the real estate industry.
Yes


(1) Classification of inventories

The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
Classified by nature:
                                                                                                                                        In RMB

                                          Closing balance                                               Opening balance

                                           Provision for                                                 Provision for
                                             inventory                                                      inventory
                                          depreciation or                                               depreciation or
        Item         Remaining book                                               Remaining book
                                             contract           Book value                                  contract            Book value
                           value                                                          value
                                         performance cost                                               performance cost
                                            impairment                                                    impairment
                                             provision                                                      provision

Development cost        403,739,412.35                         403,739,412.35          365,194,941.67                          365,194,941.67

Development
                         99,770,918.78                           99,770,918.78          99,770,918.78                           99,770,918.78
products


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Raw materials               89,660,697.09                563,013.42         89,097,683.67         68,623,793.04               563,013.42           68,060,779.62

Product in
                            51,477,301.56                                   51,477,301.56         59,444,230.45                                    59,444,230.45
process

Finished goods in
                             8,019,940.64                                       8,019,940.64        7,500,273.11                                    7,500,273.11
stock

Assets unsettled
for finished
                           127,147,139.99            1,430,361.92          125,716,778.07        133,002,090.91             1,430,361.92         131,571,728.99
construction
contracts

Low price
                                  44,694.66                                        44,694.66         146,018.01                                          146,018.01
consumable

OEM materials                2,036,765.73                                       2,036,765.73       2,022,252.83                                     2,022,252.83

Total                      781,896,870.80            1,993,375.34          779,903,495.46        735,704,518.80             1,993,375.34         733,711,143.46

Development cost and capitalization rate of its interest are disclosed as follows:
                                                                                                                                                            In RMB

                                                                       Transferr
                                                                                                 Increase                                   Including:
                                                                         ed to
                                          Estimated                                   Other      (develop                  Accumula capitalize
                           Estimated                                   developm
               Starting                     total        Opening                    decrease       ment         Closing        tive         d interest     Capital
  Project                    finish                                       ent
                 time                     investmen balance                          in this     cost) in       balance capitalize           for the       source
                                time                                   product in
                                                 t                                   period        this                     d interest       current
                                                                          this
                                                                                                  period                                     period
                                                                        period

Jiangxi                                                                                                                                                  Bank loan
                           12
Phoenix      1 May                        670,000,0 197,466,2                                   4,508,952 201,975,2 5,495,748 2,697,619 and
                           December
Land         2018                                00.00      78.49                                         .10      30.59              .30          .95 self-owne
                           2020
project                                                                                                                                                  d fund

Dakang                                                                                                                                                   Bank loan
             1             31
Village                                   3,600,000 166,868,4                                   30,384,07 197,252,5                                      and
             December December
Project in                                  ,000.00         79.94                                     9.93         59.87                                 self-owne
             2023          2029
Shenzhen                                                                                                                                                 d fund

Fangda                                                                                                                                                   Bank loan
             1             31
Bangshen                                  870,000,0 860,183.2                                   3,651,438 4,511,621                                      and
             December December
Industry                                         00.00             4                                      .65        .89                                 self-owne
             2020          2022
Park                                                                                                                                                     d fund

                                          5,140,000 365,194,9                                   38,544,47 403,739,4 5,495,748 2,697,619
Total             --             --                                                                                                                            --
                                            ,000.00         41.67                                     0.68         12.35              .30          .95

Disclose the main project information of "Development Products" according to the following format:
                                                                                                                                                            In RMB

                 Completion           Opening                                                                        Accumulative                 Including:
   Project                                               Increase           Decrease           Closing balance
                    time               balance                                                                            capitalized             capitalized


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                                                                                                      interest         interest for the
                                                                                                                       current period

Phase I of     29
Fangda         December          99,770,918.78                                     99,770,918.78      4,314,190.09                   0.00
Town           2016

Total                 --         99,770,918.78                                     99,770,918.78      4,314,190.09                   0.00


(2) Provision for inventory depreciation and contract performance cost impairment provision

The inventory depreciation provision is disclosed as follows:
Classified by nature:
                                                                                                                                 In RMB

                                         Increase in this period         Decrease in this period
                           Opening                                                                          Closing
        Item                                                          Recover or                                            Remarks
                           balance      Provision        Others                            Others           balance
                                                                      write-off

Raw materials          563,013.42                                                                            563,013.42

Assets unsettled
for finished               1,430,361.
                                                                                                           1,430,361.92
construction                      92
contracts

                           1,993,375.
Total                                                                                                      1,993,375.34         --
                                  34


(3) Capitalization rate of interest in the closing inventory balance

As at 30 June 2020, the amount of the capitalization of borrowing costs in the balance of the end-of-period inventory was
RMB9,809,938.39.


(4) Restriction of inventory

Restricted inventory is disclosed by project
                                                                                                                                 In RMB


                Project                          Opening balance           Closing balance                       Reason


Jiangxi Phoenix Land project                          99,936,207.50                   99,936,207.50 Loan by pledge

Total                                                 99,936,207.50                   99,936,207.50                   --


10. Contract assets

                                                                                                                                 In RMB



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                                                     Closing balance                                        Opening balance
             Item                    Remaining         Impairment                           Remaining        Impairment
                                                                         Book value                                              Book value
                                     book value         provision                           book value          provision

Engineering operation               1,856,679,366.                      1,659,323,267. 1,476,897,495.
                                                      197,356,098.59                                        230,109,023.56 1,246,788,471.78
portfolio                                      07                                     48              34

Real estate portfolio                                                                      183,381,421.60 17,224,488.66       166,156,932.94

Other business portfolio            40,591,306.96          757,229.44 39,834,077.52 58,537,050.01             1,404,369.18       57,132,680.83

                                    1,897,270,673.                      1,699,157,345. 1,718,815,966.
Total                                                 198,113,328.03                                        248,737,881.40 1,470,078,085.55
                                               03                                     00              95

The amount and reasons for major changes in the book value of contract assets during the current period:
                                                                                                                                         In RMB

              Item                                Change                                              Reason

Engineering             operation                                      Mainly due to the realization of sales and confirmation of contract
                                                     412,534,795.70
portfolio                                                              assets according to contract performance

                                                                       Mainly because the real estate certificate of Fangda Town No. 3
Real estate portfolio                                -166,156,932.94 Building has been completed, and the contract payment conditions
                                                                       have been met and converted into accounts receivable

                                                                       Mainly due to the conversion to accounts receivable after meeting
Other business portfolio                              -17,298,603.31
                                                                       the contract collection conditions

Total                                                229,079,259.45                                      ——

If the provision for bad debts of contract assets is made in accordance with the general model of expected credit losses, please refer to
the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
Provision made for bad debts of contract assets in this period
                                                                                                                                         In RMB

                                                            Transferred back in the    Written off in the current
            Item                       Provision                                                                              Reason
                                                                current period                   period

                                                                                                                    Mainly due to changes in
Engineering operation                                                                                               the expected credit loss
                                                                       32,752,924.97
portfolio                                                                                                           rate of contract assets in
                                                                                                                    the current period

                                                                                                                    Mainly due to the
                                                                                                                    conversion to accounts
Real estate portfolio                                                  17,224,488.66                                receivable after meeting
                                                                                                                    the contract collection
                                                                                                                    conditions

Other business portfolio                                                  647,139.74

Total                                                                  50,624,553.37                                             --



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11. Other current assets

                                                                                                                                    In RMB

                        Item                                      Closing balance                           Opening balance

Tax to be input                                                                   33,667,829.72                            25,724,810.99

Prepaid income tax                                                                12,079,853.70                            10,942,500.38

Structural loan                                                                201,790,136.99                             207,993,374.07

Reclassification of VAT debit balance                                             82,046,512.69                            79,104,900.46

Others                                                                               165,020.00

Total                                                                          329,749,353.10                             323,765,585.90


12. Long-term share equity investment

                                                                                                                                    In RMB

                                                                   Change (+,-)                                                  Balance
                                                   Investme                                                                         of
                                                                  Other
                                                    nt gain                             Cash                                     impairme
               Opening                 Decrease                 miscellan                                            Closing
    Invested               Increased               and loss                 Other     dividend Impairme                              nt
                 book                     d                       eous                                                 book
     entity                investmen               recognize                equity    or profit    nt      Others                provision
                value                  investmen                 income                                               value
                               t                    d using                 change    announce provision                         at the end
                                           t                    adjustmen
                                                   the equity                            d                                         of the
                                                                    t
                                                    method                                                                        period

1. Joint venture

2. Associate

Shenzhen
Ganshang
Joint
Investme
nt Co.,        2,360,044                                                                                             2,363,115
                                                    3,071.91
Ltd.                 .01                                                                                                   .92
(Shenzhe
n
Ganshang
)

Jiangxi
Business
Innovativ 54,862,19                                -378,274.                                                        54,483,92
e                   6.82                                  00                                                              2.82
Property
Joint



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Stock
Co., Ltd.

             57,222,24                       -375,202.                                                            56,847,03
Subtotal
                    0.83                            09                                                                 8.74

             57,222,24                       -375,202.                                                            56,847,03
Total
                    0.83                            09                                                                 8.74


13. Investment in other equity tools

                                                                                                                                 In RMB

                      Item                                Closing balance                                 Opening balance

Unlisted equity instrument investment                                     20,140,037.85                                 20,660,181.44

Total                                                                     20,140,037.85                                 20,660,181.44

Sub-disclosure of non-tradable equity instrument investment in the current period
                                                                                                                                 In RMB

                                                                                                    Reason for
                                                                             Amount of other      measurement at
                                                                                                                       Reason for
                           Dividend                                           comprehensive       fair value with
                                                                                                                     transfer of other
        Project       recognized in the   Total gain         Total loss             income          variations
                                                                                                                      miscellaneous
                             period                                            transferred to     accounted into
                                                                                                                       into income
                                                                             retained earnings    current income
                                                                                                     account

                                                                                                 Non-trading
Shenyang Fangda                                               9,958,565.45                       equity
                                                                                                 instruments

Shenzhen Huihai                                                                                  Non-trading
Yirong Internet                                               2,941,535.45                       equity
Service Co., Ltd.                                                                                instruments


14. Other non-current financial assets

                                                                                                                                 In RMB

                      Item                                Closing balance                                 Opening balance

Financial assets measured at fair value
with variations accounted into current                                      5,018,835.30                                    5,009,728.02
income account

Total                                                                       5,018,835.30                                    5,009,728.02




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IX. Investment real estates

(1) Investment real estate measured at costs

√ Applicable □ Inapplicable
                                                                                                                         In RMB

           Item                 Houses & buildings       Land using right      Construction in process           Total

I. Book value

1. Opening balance                     29,047,361.20                                    194,300,196.90           223,347,558.10

2. Increase in this period                                                                 5,002,352.86            5,002,352.86

(1) External purchase                                                                      5,002,352.86            5,002,352.86

3. Decrease in this period             18,636,669.33                                                              18,636,669.33

(1) Disposal

(2) Other transfer-out                 18,636,669.33                                                              18,636,669.33

4. Closing balance                     10,410,691.87                                    199,302,549.76           209,713,241.63

II. Accumulative
depreciation and
amortization

1. Opening balance                      7,071,934.11                                                               7,071,934.11

2. Increase in this period                134,565.12                                                                 134,565.12

(1) Provision or
                                          134,565.12                                                                 134,565.12
amortization

3. Decrease in this period              3,287,340.60                                                               3,287,340.60

(1) Disposal

(2) Other transfer-out                  3,287,340.60                                                               3,287,340.60

4. Closing balance                      3,919,158.63                                                               3,919,158.63

III. Impairment provision

1. Opening balance                              0.00                                               0.00                    0.00

2. Increase in this period                      0.00                                               0.00                    0.00

3. Decrease in this period                      0.00                                               0.00                    0.00

4. Closing balance                              0.00                                               0.00                    0.00

IV. Book value

1. Closing book value                   6,491,533.24                                    199,302,549.76           205,794,083.00

2. Opening book value                  21,975,427.09                                    194,300,196.90           216,275,623.99

Note: The other transfer of RMB 18,636,669.33 was due to the needs of business development and the transfer of part of the
industrial plant of the subsidiary Zhichuang Technology Company from external lease to self-use.



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(2) Investment real estate measured at fair value

√ Applicable □ Inapplicable
                                                                                                                                              In RMB

            Item                Houses & buildings               Land using right           Construction in process              Total

I. Opening balance                     5,306,116,360.12                                                                        5,306,116,360.12

II. Change in this period                    5,919,471.95                                                                           5,919,471.95

Add: external purchase                       5,919,471.95                                                                           5,919,471.95

Less: disposal

Change in fair value

III. Closing balance                   5,312,035,832.07                                                                        5,312,035,832.07

The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
Disclosure of investment real estate measured at fair value by projects


                                                                                                                                              In RMB

                                                                   Rental
                                       Completio Building income in Opening                   Closing fair      Change in       Reason for the
          Project           Location
                                         n time          area    the report fair value           value          fair value    change and report
                                                                   period

                                       11
Commercial podium                                                 13,749,07 1,290,742, 1,290,742,024.
                         Shenzhen October            22,565.42
of Fangda Town                                                         4.50        024.00                00
                                       2017

                                                                                                                              New decoration
                                       29
Building 1# of Fangda                                             21,557,76 3,720,019, 3,725,938,806.                         and other
                         Shenzhen December 72,517.71                                                                  0.16%
Town                                                                   3.27        334.12                07                   investment in this
                                       2018
                                                                                                                              period

                                       28
                                                                 7,971,681. 295,355,0
Fangda Building          Shenzhen December 17,792.47                                        295,355,002.00
                                                                         38         02.00
                                       2002

                                                     112,875.6    43,278,51 5,306,116, 5,312,035,832.
Total                        ——           ——                                                                      0.11%            ——
                                                     0                 9.15        360.12                07

Whether the company has investment real estate in the current construction period
√ Yes □ No
The investment real estate in the construction period of the current period:
                                                                                                                                              In RMB

                                                   Date of       Estimated total                                               Estimated finish
        Project          Location                                                    Opening amount          Closing amount
                                             commencement          investment                                                          time

Jiangxi Phoenix      Nanchang               1 May 2018            670,000,000.00       194,300,196.90         199,302,549.76 12 December


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Land project                                                                                                         2020

Total                      ——              ——           670,000,000.00      194,300,196.90      199,302,549.76           ——

Whether there is new investment real estate measured at fair value in the report period
□ Yes √ No


(3) Investment real estate without ownership certificate

                                                                                                                                 In RMB

                    Item                                     Book value                                       Reason

                                                                                            Conditions for applying for property right
Jiangxi Phoenix Land project                                               199,302,549.76
                                                                                            are not met


16. Fixed assets

                                                                                                                                 In RMB

                    Item                                   Closing balance                                Opening balance

Fixed assets                                                               484,397,283.68                               477,332,830.92

Total                                                                      484,397,283.68                               477,332,830.92


(1) Fixed assets

                                                                                                                                 In RMB

                       Houses &           Mechanical       Transportation      Electronics and
         Item                                                                                      PV power plants           Total
                        buildings         equipment           facilities        other devices

I. Original book
value:

   1. Opening
                      397,489,124.24     129,679,176.79      21,359,342.69       44,608,708.34      129,596,434.84      722,732,786.90
balance

   2. Increase in
                       18,636,669.33       2,843,131.80           21,792.06         819,189.17                           22,320,782.36
this period

     (1) Purchase                          2,843,131.80           21,792.06         808,175.98                              3,673,099.84

     (2)
Transfer-in of
construction in
progress

(3) Other
                       18,636,669.33                                                 11,013.19                           18,647,682.52
increases

   3. Decrease in
                            25,794.13        572,649.58            7,753.85         318,155.65                               924,353.21
this period



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     (1) Disposal
                                         572,649.58         7,753.85      318,155.65                          898,559.08
or retirement

(2) Other
                          25,794.13                                                                            25,794.13
decrease

  4. Closing
                     416,099,999.44   131,949,659.01   21,373,380.90   45,109,741.86    129,596,434.84    744,129,216.05
balance

II. Accumulative
depreciation

  1. Opening
                      75,577,918.79   102,194,972.59   15,634,519.78   28,429,239.34     22,208,915.98    244,045,566.48
balance

  2. Increase in
                       8,800,315.87     1,936,391.79     299,694.60       965,824.25      3,074,220.06     15,076,446.57
this period

     (1) Provision     5,521,975.27     1,936,391.79     299,694.60       965,824.25      3,074,220.06     11,798,105.97

(2) Other
                       3,278,340.60                                                                         3,278,340.60
increases

  3. Decrease in
                                         462,977.80         6,978.46      274,513.92                          744,470.18
this period

     (1) Disposal
                                         462,977.80         6,978.46      274,513.92                          744,470.18
or retirement

  4. Closing
                      84,378,234.66   103,668,386.58   15,927,235.92   29,120,549.67     25,283,136.04    258,377,542.87
balance

III. Impairment
provision

  1. Opening
                                        1,297,621.81                       56,767.69                        1,354,389.50
balance

  2. Increase in
this period

  3. Decrease in
this period

  4. Closing
                                        1,297,621.81                       56,767.69                        1,354,389.50
balance

IV. Book value

  1. Closing
                     331,721,764.78    26,983,650.62    5,446,144.98   15,932,424.50    104,313,298.80    484,397,283.68
book value

  2. Opening
                     321,911,205.45    26,186,582.39    5,724,822.91   16,122,701.31    107,387,518.86    477,332,830.92
book value




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(2) Fixed assets without ownership certificate

                                                                                                                                In RMB

                     Item                                    Book value                                        Reason

Houses in Urumuqi for offsetting debt                                        504,584.19 Historical reasons

Yuehai Office Building C 502                                                 127,598.25 Historical reasons

Construction of Chengdu Fangda Xinjin                                                      In the process of applying for property
                                                                           26,033,117.71
Base                                                                                       right certificate




17. Construction in process

                                                                                                                                In RMB

                     Item                                  Closing balance                               Opening balance

Construction in process                                                   138,881,024.27                                129,988,982.86

Total                                                                     138,881,024.27                                129,988,982.86


(1) Construction in progress

                                                                                                                                In RMB

                                         Closing balance                                          Opening balance
        Item         Remaining book        Impairment                         Remaining book         Impairment
                                                             Book value                                                 Book value
                            value           provision                              value              provision

Construction and
decoration of
self-use part of       54,741,274.27                         54,741,274.27      54,275,503.95                            54,275,503.95
Building 1 of
Fangda Town

Fangda Group
East China
                       82,806,788.86                         82,806,788.86      75,473,740.65                            75,473,740.65
Construction
Base Project

System of
intelligent gluing           23,242.53                           23,242.53          23,242.53                                23,242.53
robot

Standard
                            288,563.73                          288,563.73         216,495.73                              216,495.73
production line

Fangda Hope
                            714,521.85                          714,521.85
Primary School




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Xuanfeng power
station power
safety monitoring
system and
                             117,000.00                                    117,000.00
renewable energy
big data platform
access system
project

Xinjin plant gas
system
                             189,633.03                                   189,633.03
installation
project

Total                    138,881,024.27                                138,881,024.27       129,988,982.86                             129,988,982.86


(2) Changes in major construction in process in this period

                                                                                                                                                  In RMB

                                                                                    Proporti
                                               +Amoun                                                                  Includin
                                                                                     on of
                                                   t                                                                      g:
                                                                                    accumul                Accumul
                                               transfer-i    Other                                                     capitaliz
                                   Increase                                           ative                  ative                 Interest
                         Opening                 n to       decrease Closing                     Project                  ed                     Capital
 Project       Budget              in this                                          engineeri              capitaliz               capitaliz
                         balance                 fixed       in this     balance                progress               interest                  source
                                   period                                              ng                     ed                   ation rate
                                               assets in    period                                                     for the
                                                                                    investme               interest
                                                  this                                                                 current
                                                                                    nt in the
                                                period                                                                  period
                                                                                     budget

Construc
tion and
decoratio
n of
self-use    74,270,0 54,275,5 465,770.                                   54,741,2                          3,253,13                             Self-own
                                                                                     79.39% 79.39%
part of          00.00     03.95          32                               74.27                               6.04                             ed fund
Building
1 of
Fangda
Town

                                                                                                                                                Own
Fangda
                                                                                                                                                funds
Group
                                                                                                                                                and
East        102,586, 75,473,7 7,333,04                                   82,806,7                          14,499,8 1,111,99
                                                                                     80.72% 80.72%                                    5.46% loans
China           625.00     40.65       8.21                                88.86                              31.54        0.87
                                                                                                                                                from
Construc
                                                                                                                                                financial
tion Base
                                                                                                                                                institutio

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Project                                                                                                                ns

              176,856, 129,749, 7,798,81             137,548,                           17,752,9 1,111,99
Total                                                               --         --                             5.46%         --
               625.00     244.60     8.53              063.13                              67.58       0.87


18. Intangible assets

(1) Intangible assets

                                                                                                                            In RMB

          Item                Land using right       Patent                         Software                   Total

I. Book value

     1. Opening
                                     78,751,482.29      8,966,866.05                   17,892,864.49           105,611,212.83
balance

     2. Increase in
                                                              13,000.00                    43,439.82                   56,439.82
this period

          (1) Purchase                                        13,000.00                    43,439.82                   56,439.82

  3. Decrease in this
period

          (1) Disposal

     4. Closing
                                     78,751,482.29      8,979,866.05                   17,936,304.31           105,667,652.65
balance

II. Accumulative
amortization

     1. Opening
                                     12,802,236.28      8,028,555.36                    6,458,156.14            27,288,947.78
balance

     2. Increase in
                                      1,131,134.80        234,613.29                     751,883.48              2,117,631.57
this period

          (1) Provision               1,131,134.80        234,613.29                     751,883.48              2,117,631.57

     3. Decrease in
this period

     4. Closing
                                     13,933,371.08      8,263,168.65                    7,210,039.62            29,406,579.35
balance

III. Impairment
provision

     1. Opening
balance

     2. Increase in
this period

     3. Decrease in

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this period

      4. Closing
balance

IV. Book value

      1. Closing book
                                    64,818,111.21                   716,697.40              10,726,264.69              76,261,073.30
value

      2. Opening
                                    65,949,246.01                   938,310.69              11,434,708.35              78,322,265.05
book value

Intangible asset formed by internal R&D of the period takes up 11.60% in the closing total book value of intangible assets.


(XIX) Long-term amortizable expenses

                                                                                                                              In RMB

                                               Increase in this     Amortized amount
          Item          Opening balance                                                     Other decrease        Closing balance
                                                    period             in this period

Xuanfeng Chayuan
village and Zhuyuan
                              1,140,730.22                                    28,050.78                                1,112,679.44
village land transfer
compensation

Reconstruction
project of sample               462,854.58                                    57,856.80                                  404,997.78
room

Membership fee                  637,499.92               6,250.00            115,000.02                                  528,749.90

Waterproofing works
for employee                    460,084.29                                    49,294.74                                  410,789.55
dormitories

Management
consulting service              901,552.04                                   238,121.77                                  663,430.27
fee

Warehouse addition
and renovation                  272,477.07                                    30,275.22                                  242,201.85
project

Addition and
renovation project of                                 541,284.40              90,214.08                                  451,070.32
glue area

Others                                                149,512.81                  581.32                                 148,931.49

Total                         3,875,198.12            697,047.21             609,394.73                                3,962,850.60




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20. Differed income tax assets and differed income tax liabilities

(1) Non-deducted deferred income tax assets

                                                                                                                                     In RMB

                                              Closing balance                                        Opening balance
            Item            Deductible temporary        Deferred income tax           Deductible temporary     Deferred income tax
                                 difference                       assets                   difference                    assets

Assets impairment
                                    93,590,747.27                  23,063,418.45               93,590,747.27              23,063,418.45
provision

Deductible loss                    281,570,405.26                  68,828,235.41              271,310,599.01              67,626,700.92

Unrealizable gross profit          121,664,373.75                  29,786,127.24              119,543,729.80              29,233,320.47

Credit impairment
                                   399,313,861.39                  64,051,091.44              473,809,506.79              75,229,494.57
provision

Provided unpaid taxes              583,427,563.55                 145,856,890.89              584,599,356.81             146,149,839.20

Anticipated liabilities              4,426,285.92                      663,942.89               7,793,527.16                1,169,029.07

Donation                             1,700,000.00                      425,000.00                 700,000.00                  175,000.00

Reserved expense                                                                                1,742,978.53                  261,446.78

Deferred earning                     2,449,739.03                      363,028.88               2,346,742.62                  347,579.43

Others                                                                                            413,650.31                      93,735.81

Total                            1,488,142,976.17                 333,037,735.20            1,555,850,838.30             343,349,564.70


(2) Non-deducted deferred income tax liabilities

                                                                                                                                     In RMB

                                              Closing balance                                        Opening balance
            Item             Taxable temporary          Deferred income tax            Taxable temporary       Deferred income tax
                                 difference                     liabilities                difference                  liabilities

Change in fair value             4,102,516,372.60               1,025,447,525.51            4,101,290,434.14           1,025,322,608.53

Estimated gross margin
when Fangda Town
records income, but does           108,771,380.35                  27,192,845.09              132,104,998.74              33,026,249.69
not reach the taxable
income level

Acquire premium to form
                                     1,535,605.48                      383,901.37               1,535,605.47                  383,901.37
inventory

Rental income                       25,774,151.06                    6,443,537.78              20,401,597.60                5,100,399.41

Total                            4,238,597,509.49               1,059,467,809.75            4,255,332,635.95           1,063,833,159.00



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(3) Net deferred income tax assets or liabilities listed

                                                                                                                                              In RMB

                                                              Offset balance of             Deferred income tax             Offset balance of
                               Deferred income tax
                                                             deferred income tax           assets and liabilities at       deferred income tax
              Item            assets and liabilities at
                                                           assets or liabilities after      the beginning of the         assets or liabilities after
                              the end of the period
                                                                   offsetting                      period                        offsetting

Deferred income tax
                                                                     333,037,735.20                                                 343,349,564.70
assets

Deferred income tax
                                                                   1,059,467,809.75                                              1,063,833,159.00
liabilities


(4) Details of unrecognized deferred income tax assets

                                                                                                                                              In RMB

                       Item                                    Closing balance                                   Opening balance

Deductible temporary difference                                                      89,056.59                                          446,874.58

Deductible loss                                                                   7,087,089.46                                        8,983,744.38

Total                                                                             7,176,146.05                                        9,430,618.96


(5) Deductible losses of the un-recognized deferred income tax asset will expire in the following years

                                                                                                                                              In RMB

                Year                        Closing amount                       Opening amount                              Remarks

2020                                                        30,257.35                              30,257.35

2021                                                               0.00                                  0.00

2022                                                      1,270,623.72                         2,286,265.51

2023                                                      4,575,983.46                         5,390,985.76

2024                                                       798,893.17                          1,276,235.76

2025                                                       411,331.76

Total                                                     7,087,089.46                         8,983,744.38                      --


21. Other non-current assets

                                                                                                                                              In RMB

                                                               Closing balance                                   Opening balance
                       Item                      Remaining       Impairment                         Remaining          Impairment
                                                                                  Book value                                          Book value
                                                 book value        provision                        book value         provision

Prepaid house and equipment amount              37,015,653.0                      37,015,653.0 28,446,802.0                           28,446,802.0


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                                                         0                            0              0                           0

Prepaid engineering amount                                                                 255,000.00                   255,000.00

                                             37,015,653.0                   37,015,653.0 28,701,802.0                  28,701,802.0
Total
                                                         0                            0              0                           0


22. Short-term borrowings

(1) Classification of short-term borrowings

                                                                                                                            In RMB

                   Item                                   Closing balance                            Opening balance

Loan by pledge                                                           30,008,266.67                             200,318,605.55

Guarantee loan                                                          418,726,349.99                             216,287,991.79

Credit borrow                                                           300,091,250.00                                 8,011,600.00

The Group's internal acceptance bills
                                                                        531,809,800.00                             300,000,000.00
discounted borrowings

Total                                                                 1,280,635,666.66                             724,618,197.34


23. Derivative financial liabilities

                                                                                                                            In RMB

                   Item                                   Closing balance                            Opening balance

Forward foreign exchange contract                                                                                        96,767.62

Total                                                                                                                    96,767.62




24. Notes payable

                                                                                                                            In RMB

                   Type                                   Closing balance                            Opening balance

Commercial acceptance                                                   154,105,118.94                             129,241,328.76

Bank acceptance                                                         377,373,250.29                             449,574,698.68

Total                                                                   531,478,369.23                             578,816,027.44

The total amount of payable bills that have matured but not been paid at the end of the period is RMB0.00.


25. Account payable

(1) Account payable

                                                                                                                            In RMB

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                    Item                                   Closing balance                              Opening balance

Account repayable and engineering
                                                                        830,540,797.17                                 811,680,369.67
repayable

Construction payable                                                     22,175,837.84                                  75,375,776.11

Payable installation and implementation
                                                                        249,475,834.32                                 297,516,473.34
fees

Others                                                                       4,404,991.26                                 6,200,681.12

Total                                                                 1,106,597,460.59                                1,190,773,300.24


(2) Significant payables aging more than 1 year

                                                                                                                               In RMB

                    Item                                   Closing balance                                   Reason

Supplier 1                                                               47,481,709.04 Not mature

Supplier 2                                                               17,655,833.07 Not mature

Supplier 3                                                               11,011,440.33 Not mature

Supplier 4                                                                   7,381,161.50 Not mature

Supplier 5                                                                   5,788,761.88 Not mature

Total                                                                    89,318,905.82                         --


26. Prepayment received

(1) Prepayment received

                                                                                                                               In RMB

                    Item                                   Closing balance                              Opening balance

Real estate lease payments received in
                                                                             4,195,179.31                                 1,332,457.45
advance

Total                                                                        4,195,179.31                                 1,332,457.45

The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
Payment received from top 5 presales projects:
                                                                                                                               In RMB

          No.                 Project            Opening balance     Closing balance        Estimated finish time Presales percentage

                       Jiangxi Phoenix
            1                                           677,650.00       22,842,092.00 December         2020                    5.07%
                       Land project

Note: The ending balance of the above-mentioned advance receipts of RMB22,842,092.00 shall be listed in contract liabilities and
other current liabilities according to the new income standard.


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27. Contract liabilities

                                                                                                                               In RMB

                      Item                               Closing balance                                Opening balance

Engineering business                                                     110,649,396.36                               120,396,559.54

Real estate                                                               25,134,270.22                                   2,831,768.42

Other businesses                                                           1,015,798.18                                    752,948.55

Total                                                                    136,799,464.76                               123,981,276.51

The amount and reason for the significant change in the book value during the reporting period
                                                                                                                               In RMB

              Item                         Change                                              Reason

Engineering business                             -9,747,163.18 Mainly due to the performance of the contract in the current period

                                                                 Mainly due to the funds obtained from the pre-sale of real estate in
Real estate                                      22,302,501.80
                                                                 the current period

Other businesses                                    262,849.63

              Total                              12,818,188.25                                   ——


28. Employees’ wage payable

(1) Employees’ wage payable

                                                                                                                               In RMB

          Item                 Opening balance               Increase                     Decrease              Closing balance

1. Short-term
                                      55,534,644.34            134,819,463.16              165,836,253.15              24,517,854.35
remuneration

2. Retirement pension
program-defined                           25,334.86               2,258,671.22               2,208,392.42                   75,613.66
contribution plan

3. Dismiss compensation                  287,155.00                 560,450.00                 847,605.00

Total                                 55,847,134.20            137,638,584.38              168,892,250.57              24,593,468.01


(2) Short-term remuneration

                                                                                                                               In RMB

          Item                 Opening balance               Increase                     Decrease              Closing balance

1. Wage, bonus,
                                      54,054,805.08            126,366,654.32              157,659,945.37              22,761,514.03
allowance and subsidies

2. Employee welfare                                               2,664,209.05               2,622,798.55                   41,410.50



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3. Social insurance                        8,812.80           2,002,672.02                 1,867,944.09               143,540.73

      Including: medical
                                           8,812.80           1,601,468.63                 1,508,469.10               101,812.33
insurance

               Labor injury
                                                                151,104.28                   150,107.05                   997.23
insurance

               Breeding
                                                                250,099.11                   209,367.94                40,731.17
insurance

4. Housing fund                           45,924.00           3,185,590.39                 3,151,600.39                79,914.00

5. Labor union budget
                                        1,425,102.46            600,337.38                   533,964.75              1,491,475.09
and staff education fund

Total                               55,534,644.34          134,819,463.16                165,836,253.15          24,517,854.35


(3) Defined contribution plan

                                                                                                                          In RMB

            Item              Opening balance             Increase                      Decrease           Closing balance

1. Basic pension                          25,334.86           2,190,347.33                 2,141,731.97                73,950.22

2. Unemployment
                                                                 68,323.89                    66,660.45                  1,663.44
insurance

Total                                     25,334.86           2,258,671.22                 2,208,392.42                75,613.66


29. Taxes payable

                                                                                                                          In RMB

                      Item                             Closing balance                             Opening balance

VAT                                                                      4,703,096.74                                5,138,273.83

Enterprise income tax                                                11,103,995.91                                   8,013,627.51

Personal income tax                                                       805,124.13                                 1,111,213.06

City maintenance and construction tax                                    1,044,730.49                                1,499,926.15

Land using tax                                                            412,829.44                                  241,855.73

Property tax                                                             1,606,236.85                                 265,016.74

Education surtax                                                          532,106.52                                  736,138.35

Local education surtax                                                    216,369.67                                  352,390.86

Land VAT                                                                                                               31,084.86

Others                                                                    862,911.01                                  459,460.59

Total                                                                21,287,400.76                               17,848,987.68




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30. Other payables

                                                                                                                  In RMB

                   Item                         Closing balance                            Opening balance

Other payables                                               712,243,884.21                              701,432,408.28

Total                                                        712,243,884.21                              701,432,408.28


(1) Other payables

1) Other payables presented by nature

                                                                                                                  In RMB

                   Item                         Closing balance                            Opening balance

Performance and quality deposit                               48,650,845.18                                46,117,111.79

Deposit                                                       13,625,876.46                                  4,885,326.38

Reserved expense                                              11,810,759.96                                17,194,987.92

Tax withheld                                                 583,427,563.55                              584,599,356.81

Pledge                                                                                                        300,000.00

Others                                                        54,728,839.06                                48,335,625.38

Total                                                        712,243,884.21                              701,432,408.28


(2) Significant payables aging more than 1 year

                                                                                                                  In RMB

                   Item                         Closing balance                                 Reason

Shenzhen Yikang Real Estate Co. Ltd.                          18,606,927.46 Affiliated party payment

                                                                              Land value-added tax has yet to be settled
Tax withheld                                                 573,957,082.47
                                                                              and paid

Total                                                        592,564,009.93                       --


31. Non-current liabilities due within 1 year

                                                                                                                  In RMB

                   Item                         Closing balance                            Opening balance

Long-term loans due within 1 year                            151,617,767.59                              922,346,563.72

Total                                                        151,617,767.59                              922,346,563.72




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32. Other current liabilities

                                                                                                                                              In RMB

                         Item                                       Closing balance                              Opening balance

Unterminated notes receivable                                                     36,807,182.46                                     169,688,481.80

Substituted money on VAT                                                          10,537,838.72                                      12,006,092.67

Others                                                                            13,953,454.50                                      11,026,370.77

Total                                                                             61,298,475.68                                     192,720,945.24


33. Long-term borrowings

(1) Classification of long-term borrowings

                                                                                                                                              In RMB

                         Item                                       Closing balance                              Opening balance

Loan by pledge                                                                                                                      293,978,153.39

Loan by pledge                                                                 1,151,161,462.35                                     182,523,338.17

Guarantee loan                                                                                                                       70,000,000.00

Total                                                                          1,151,161,462.35                                     546,501,491.56

The interest rate period of long-term borrowings: adjust according to the agreed proportion based on the LPR interest rate, and the
upper limit is 6.615%.


34. Anticipated liabilities

                                                                                                                                              In RMB

                  Item                            Closing balance                     Opening balance                        Reason

Maintenance fee                                             4,426,285.92                        7,793,527.16 Contract agreement

Total                                                       4,426,285.92                        7,793,527.16                    --


35. Deferred earning

                                                                                                                                              In RMB

           Item                 Opening balance           Increase               Decrease               Closing balance              Reason

                                                                                                                            See the following
Government subsidy                  10,817,247.40             200,000.00                193,359.99          10,823,887.41
                                                                                                                            table

Total                               10,817,247.40             200,000.00                193,359.99          10,823,887.41              --

Items involving government subsidies:
                                                                                                                                              In RMB

        Liabilities             Opening     Amount of       Amount         Other misc.      Costs offset Other       Closing           Related to


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                       balance       new subsidy included    gains recorded in the period change       balance      assets/earnin
                                                    in       in this period                                               g
                                                non-operat
                                                   ing
                                                 revenue

Railway transport
screen door
controlling system                                                                                                  Assets-relate
                        77,653.85                                  9,452.16                             68,201.69
and information                                                                                                     d
transmission
technology

Major investment
project prize from
Industry and Trade
                                                                                                                    Assets-relate
Development           1,623,809.90                                28,571.40                          1,595,238.50
                                                                                                                    d
Division of
Dongguan Finance
Bureau

Distributed PV
power generation
project subsidy
                                                                                                                    Assets-relate
sponsored by           393,750.17                                 12,499.98                            381,250.19
                                                                                                                    d
Dongguan Reform
and Development
Commission

Subsidized land                                                                                                     Assets-relate
                       177,278.87                                  1,862.82                            175,416.05
transfer                                                                                                            d

Special subsidy for
industrial
                                                                                                                    Assets-relate
transformation,        800,000.00                                 20,000.01                            779,999.99
                                                                                                                    d
upgrading and
development

Enterprise
informationization
subsidy project of                                                                                                  Assets-relate
                       468,000.00                                 24,000.00                            444,000.00
Shenzhen Small and                                                                                                  d
Medium Enterprise
Service Agency

National Industry
Revitalization and                                                                                                  Assets-relate
                      7,276,754.61                                61,993.62                          7,214,760.99
Technology                                                                                                          d
Renovation Project


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fund

Shenzhen Science
and Technology
Innovation                                                                                                                    Earning-relat
                                          200,000.00                      34,980.00                              165,020.00
Committee                                                                                                                     ed
Technology
Innovation Subsidy

Total                    10,817,247.40    200,000.00         0.00        193,359.99            0.00      0.00 10,823,887.41


36. Capital share

                                                                                                                                      In RMB

                                                                         Change (+,-)
                     Opening                                                                                                    Closing
                                     Issued new                          Transferred
                     balance                           Bonus shares                          Others           Subtotal          balance
                                         shares                         from reserves

Total of capital 1,123,384,189.                                                                                           1,088,278,951.
                                                                                          -35,105,238.00 -35,105,238.00
shares                         00                                                                                                         00

Others:
The decrease in share capital was due to the repurchase and cancellation of B shares by the company during the reporting period.


37. Capital reserve

                                                                                                                                      In RMB

          Item                  Opening balance                 Increase                      Decrease               Closing balance

Capital premium (share
                                                  94.24                                                                                94.24
capital premium)

Other capital reserves                     154,097.35                                                                              154,097.35

Total                                     1,454,191.59                                                                        1,454,191.59


38. Shares in stock

                                                                                                                                      In RMB

          Item                  Opening balance                 Increase                      Decrease               Closing balance

Shares in stock                                                       99,385,887.28              99,385,887.28

Total                                                                 99,385,887.28              99,385,887.28

Other note, including explanation about the reason of the change:
①The company held the nineteenth meeting of the eighth session of the board of directors and the first extraordinary general meeting
of shareholders on November 28, 2019 and December 16, 2019, respectively, and reviewed and approved the company’s repurchase
of some domestically listed foreign shares (B shares). As of June 30, 2020, 35,105,238 shares were repurchased through centralized
bidding. The highest price was HKD 3.33 per share and the lowest price was HKD 2.45 per share. The actual cumulative payment of


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108,930,044.20 Hong Kong dollars (including transaction costs) was included in the treasury stock of RMB 99,385,887.28. Yuan, on
May 20, 2020, the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. completed the repurchase and
cancellation procedures of the above-mentioned shares.
② 35,105,238 shares of share capital reduced as a result of the write-off of treasury shares;
③If the cost of the cancelled inventory shares is higher than the corresponding cost of equity, the surplus reserve of RMB
64,280,649.28 is offset when the cancellation is made.


39. Other miscellaneous income

                                                                                                                                               In RMB

                                                                          Amount occurred in the current period

                                                                                        Less:
                                                                                       amount
                                                                     Less: amount
                                                                                       written                                   After-tax
                                                                     written into
                                                                                      into other                 After-tax        amount
                                                                      other gains                    Less:
                                       Opening         Amount                         gains and                   amount    attributed Closing
               Item                                                       and                       Income
                                        balance         before                        transferred                attributed      to    balance
                                                                      transferred                     tax
                                                      income tax                         into                      to the         minority
                                                                     into gain/loss                 expenses
                                                                                      gain/loss                   parent         shareholde
                                                                      in previous
                                                                                          in                                         rs
                                                                         terms
                                                                                       previous
                                                                                        terms

1. Other misc. incomes that
                                      -9,192,030.3 -520,143.5                                                    -520,143.5                   -9,712,1
cannot be re-classified into gain
                                                  8              9                                                          9                   73.97
and loss

        Fair value change of          -9,192,030.3 -520,143.5                                                    -520,143.5                   -9,712,1
investment in other equity tools                  8              9                                                          9                   73.97

2. Other misc. incomes that will      8,716,621.1 1,747,943.                                        286,866.6 1,461,076.                      10,177,6
be re-classified into gain and loss               3          19                                              0              59                  97.72

                                                      1,912,443.                                    286,866.6 1,625,577.                      1,543,32
        Cash flow hedge reserve        -82,252.47
                                                             96                                              0              36                    4.89

        Translation difference of                     -164,500.7                                                 -164,500.7                   -122,180
                                        42,320.14
foreign exchange statement                                       7                                                          7                      .63

Investment real estate measured at 8,756,553.4                                                                                                8,756,55
fair value                                        6                                                                                               3.46

                                                      1,227,799.                                    286,866.6 940,933.0                       465,523.
Other miscellaneous income            -475,409.25
                                                             60                                              0              0                      75


40. Surplus reserves

                                                                                                                                               In RMB



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            Item                 Opening balance                Increase                   Decrease                 Closing balance

Statutory surplus
                                      159,805,930.34                                            64,280,649.28             95,525,281.06
reserves

Total                                 159,805,930.34                                            64,280,649.28             95,525,281.06

The decrease in the surplus reserve in the current period was due to the fact that the cost of the cancelled treasury shares was higher
than the cost of the corresponding equity, and the surplus reserve was offset at the time of cancellation.


41. Retained profit

                                                                                                                                  In RMB

                          Item                                    Current period                                Last period

Adjustment on retained profit of previous period                            3,898,626,177.99                           3,921,225,872.96

Total of retained profit at beginning of year
                                                                                                                          16,171,320.58
adjusted (+ for increase, - for decrease)

Retained profit adjusted at beginning of year                               3,898,626,177.99                           3,937,397,193.54

Plus: Net profit attributable to owners of the
                                                                               146,839,884.57                            128,581,755.01
parent

     Common share dividend payable                                              54,413,947.55                            224,676,837.79

Closing retained profit                                                     3,991,052,115.01                           3,841,302,110.76


42. Operational revenue and costs

                                                                                                                                  In RMB

                                   Amount occurred in the current period                        Occurred in previous period
            Item
                                     Income                       Cost                      Income                        Cost

Main business                        1,199,257,200.97            964,480,180.21            1,385,429,784.95            1,055,781,224.98

Other businesses                       52,350,863.45                5,890,231.85                40,461,162.04             10,284,745.58

Total                                1,251,608,064.42            970,370,412.06            1,425,890,946.99            1,066,065,970.56

Income information:
                                                                                                                                 单位:元

  Contract type       Curtain wall     Railway transport      Real estate          New energy           Others                Total

Product type          841,699,185.33        333,462,675.90     58,349,363.38        9,727,737.59       8,369,102.22 1,251,608,064.42

Including: curtain
wall system and       841,699,185.33                                                                                     841,699,185.33
materials

Subway screen
                                            333,462,675.90                                                               333,462,675.90
door and services

Real estate sales                                              58,349,363.38                                              58,349,363.38


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PV power
generation                                                                        9,727,737.59                          9,727,737.59
products

Other                                                                                                 8,369,102.22      8,369,102.22

Total                 841,699,185.33     333,462,675.90      58,349,363.38        9,727,737.59        8,369,102.22 1,251,608,064.42

Information related to performance obligations:
The two businesses of the company's curtain wall system and materials, subway screen doors and services are mainly the contracts
corresponding to the engineering projects. Usually, a contract constitutes a single performance obligation and is a performance
obligation performed within a certain period of time. The company recognizes revenue according to the performance progress.
The sales of photovoltaic power generation products and real estate belong to contracts corresponding to commodity sales. Usually, a
contract constitutes a single performance obligation and is a performance obligation at a certain point in time. Revenue is recognized
when the customer obtains control of the relevant product.
Information related to the transaction price allocated to the remaining performance obligations:
The amount of revenue corresponding to the performance obligations that have been signed, but not yet performed or not yet
performed at the end of the reporting period is 4,367,812,121.53 yuan, of which 1,760,900,149.38 yuan is expected to be recognized
in 2020, and 1,817,152,403.45 yuan is expected to be recognized in 2021, 789,759,568.70 yuan It is expected that revenue will be
recognized in 2022 and beyond.
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
Top-5 projects in terms of income received and recognized in the reporting period: None


43. Taxes and surcharges

                                                                                                                                 In RMB

                    Item                       Amount occurred in the current period               Occurred in previous period

City maintenance and construction tax                                      2,385,728.64                                 3,306,190.50

Education surtax                                                           1,686,251.96                                 2,197,616.65

Property tax                                                               2,227,891.98                                 2,367,178.99

Land using tax                                                               684,461.08                                   772,262.35

Vehicle usage tax                                                               9,780.00                                   15,960.00

Stamp tax                                                                    473,893.06                                   945,391.73

Land VAT                                                                                                               31,689,811.56

Others                                                                        58,508.26                                   186,588.29

Total                                                                      7,526,514.98                                41,481,000.07


44. Sales expense

                                                                                                                                 In RMB

                    Item                       Amount occurred in the current period               Occurred in previous period



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Labor costs                                                  10,756,603.46                             13,756,507.19

Freight and miscellaneous charges                             3,781,184.56                              2,552,065.93

Travel expense                                                  487,521.11                                684,332.50

Entertainment expense                                           871,505.28                                979,949.90

Material consumption                                            490,460.47                                135,028.48

Office costs                                                    262,176.26                                 48,247.56

Rental                                                        1,105,257.44                                952,964.78

Advertisement and promotion fee                                 934,902.84                                865,854.97

Sales agency fee                                              1,726,247.64                              5,943,528.83

Others                                                          562,376.03                              1,257,158.36

Total                                                        20,978,235.09                             27,175,638.50


45. Management expenses

                                                                                                                 In RMB

                    Item            Amount occurred in the current period          Occurred in previous period

Labor costs                                                  38,668,384.40                             47,235,320.97

Depreciation and amortization                                 4,117,481.73                              4,810,846.91

Agencies                                                      5,871,925.65                              4,403,164.17

Maintenance costs                                             2,003,855.95                              7,845,937.09

Water and electricity                                           100,825.03                                351,795.21

Office expense                                                4,386,275.49                              1,263,021.34

Travel expense                                                  661,807.94                                993,288.82

Entertainment expense                                         1,483,128.99                              1,676,576.80

Rental                                                        1,146,766.83                                752,831.06

Lawsuit                                                         274,438.54                                337,101.22

Material consumption                                            161,161.21                                145,197.52

Property management fee                                         375,160.71                                666,254.99

Others                                                        3,308,250.69                             12,197,441.46

Total                                                        62,559,463.16                             82,678,777.56


46. R&D cost

                                                                                                                 In RMB

                    Item            Amount occurred in the current period          Occurred in previous period

Labor costs                                                  28,410,847.77                              9,107,318.28


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Material costs                                                 17,682,878.47                              1,605,931.43

Rental                                                            992,251.86                                938,339.52

Depreciation costs                                                734,440.47                                304,783.16

Amortization of intangible assets                                 578,107.24                                 41,402.02

Travel expense                                                     34,950.20                                 43,113.02

Maintenance costs                                                 426,989.21                                 44,792.26

Test and experiment costs                                       1,869,321.47                              2,141,801.56

Patent maintenance costs                                          229,952.90                                299,269.18

Others                                                            639,571.28                                175,922.69

Total                                                          51,599,310.87                             14,702,673.12


47. Financial expenses

                                                                                                                   In RMB

                     Item             Amount occurred in the current period          Occurred in previous period

Interest expense                                               46,974,588.65                             41,338,886.48

Less: interest capitalization                                   3,809,610.82

Less: discount government subsidies                                                                         862,000.00

Less: Interest income                                           6,952,304.21                              2,439,090.91

Acceptant discount                                              6,049,511.72                              8,563,237.66

Exchange gain/loss                                               -311,399.26                                 99,040.10

Commission charges and others                                   2,933,782.63                              2,781,267.03

Total                                                          44,884,568.71                             49,481,340.36


48. Other gains

                                                                                                                   In RMB

                   Source             Amount occurred in the current period          Occurred in previous period

VAT rebated                                                     2,649,784.42                              1,359,044.12

Energy saving subsidy                                             980,000.00

R&D subsidy                                                       789,252.16                                696,000.00

Income tax and commission rebate                                  477,506.39                                  1,395.63

VAT, income tax rebate                                            260,464.56                                 95,000.00

Job stabilization, pre-job training
subsidies, unemployment insurance                                 400,564.26                                 12,400.00
premium refund



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Innovation award                                                            130,500.00                                 36,500.00

Nanshan District independent innovation
                                                                             14,500.00                                500,000.00
industry development special fund

Science and Technology Commission
                                                                             34,980.00                                130,040.00
innovation coupon

Self-breathing dual-layer hallow grass
energy-saving curtain wall development                                       61,993.62                                 61,993.62
project

Childbearing subsidy                                                         45,932.33                                112,877.76

Integration sponsorship                                                                                               200,000.00

Enterprise innovation ability cultivation
                                                                                                                      508,000.00
and support

2018 Shenzhen standard allowance                                                                                      102,000.00

Hi-tech enterprise award                                                                                              100,000.00

Others                                                                      368,635.03                                 86,199.38

Total                                                                     6,214,112.77                              4,001,450.51


49. Investment income

                                                                                                                             In RMB

                       Item                        Amount occurred in the current period        Occurred in previous period

Gains from long-term equity investment
                                                                               -375,202.09                           -325,733.55
measured by equity

Investment income of trading financial assets
                                                                                                                   17,359,985.03
during the holding period

Investment income from disposal of trading
                                                                                                                  -16,598,749.99
financial assets

Investment gain of financial products                                         2,226,413.78                          4,003,332.19

Others                                                                         -309,081.13                           -382,436.52

Financial assets derecognised as a result of
                                                                             -2,255,794.10
amortized cost

Total                                                                          -713,663.54                          4,056,397.16




50. Income from fair value fluctuation

                                                                                                                             In RMB

 Source of income from fluctuation of fair      Amount occurred in the current period          Occurred in previous period



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                        value

Transactional financial assets                                                                                          121,506.67

Gains from changes in fair value of other
                                                                              9,107.28
non-current financial assets

Total                                                                         9,107.28                                  121,506.67




51. Credit impairment loss

                                                                                                                             In RMB

                        Item                  Amount occurred in the current period            Occurred in previous period

Bad debt loss of other receivables                                        -658,154.43                                 7,114,165.08

Contract asset impairment loss                                          50,624,553.37

Bad debt loss of account receivable                                     24,887,786.32                               -11,483,825.46

Total                                                                   74,854,185.26                                -4,369,660.38


52. Assets impairment loss

None


53. Assets disposal gains

                                                                                                                             In RMB

                    Source                    Amount occurred in the current period            Occurred in previous period

Gain and loss from disposal of fixed assets
                                                                             -1,981.72                                  -27,108.78
("-" for loss)


54. Non-business income

                                                                                                                             In RMB

                                 Amount occurred in the current                                      Amount accounted into the
                 Item                                               Occurred in previous period
                                              period                                                 current accidental gain/loss

Penalty income                                         172,413.23                      401,931.00                       172,413.23

Compensation received                                    4,740.00                     4,378,501.74                        4,740.00

Payable account not able to be
                                                                                          1,350.91
paid

Others                                                  98,688.41                        92,108.50                       98,688.41

Total                                                  275,841.64                     4,873,892.15                      275,841.64




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55. Non-business expenses

                                                                                                                               In RMB

                                  Amount occurred in the current                                       Amount accounted into the
               Item                                                    Occurred in previous period
                                               period                                                  current accidental gain/loss

Donation                                                5,113,500.00                     122,000.00                      5,113,500.00

Loss from retirement os
                                                         123,770.81                        30,871.84                      123,770.81
damaged non-current assets

Penalty and overdue fine                                   3,731.07                        81,936.95                        3,731.07

Lawsuit indemnity                                                                        143,641.00

Others                                                    34,866.45                          116.01                        34,866.45

Total                                                 5,275,868.33                       378,565.80                      5,275,868.33


56. Income tax expenses

(1) Details about income tax expense

                                                                                                                               In RMB

                      Item                      Amount occurred in the current period            Occurred in previous period

Income tax expenses in this period                                         16,583,321.25                              26,190,753.94

Deferred income tax expenses                                                5,659,613.66                               -2,171,494.23

Total                                                                      22,242,934.91                              24,019,259.71


(2) Adjustment process of accounting profit and income tax expense

                                                                                                                               In RMB

                               Item                                              Amount occurred in the current period

Total profit                                                                                                         169,051,292.91

Income tax expenses calculated based on the legal (or applicable)
                                                                                                                      42,262,823.23
tax rates

Impacts of different tax rates applicable for some subsidiaries                                                       -18,604,275.19

Impacts of income tax before adjustment                                                                                   694,341.23

Impacts of non-deductible cost, expense and loss                                                                          613,345.12

Impacts of using deductible loss of unrecognized deferred
                                                                                                                         -310,329.56
income tax assets

Deductible temporary difference and deductible loss of
                                                                                                                           43,276.68
unrecognized deferred income tax assets

Profit and loss of associates and joint ventures calculated using                                                          93,800.52



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the equity method

Taxation impact of R&D expense and (presented with ―-‖)                                                       -2,350,314.46

Others                                                                                                            -199,732.65

Income tax expenses                                                                                             22,242,934.91


57. Other miscellaneous income

See Note VII 39.


58. Notes to the cash flow statement

(1) Other cash inflow related to operation

                                                                                                                          In RMB

                    Item                     Amount occurred in the current period          Occurred in previous period

Interest income                                                        3,906,753.15                                901,193.29

Subsidy income                                                         2,673,142.53                              3,590,774.08

Retrieving of bidding deposits                                       194,487,618.44                             37,655,725.50

Other operating accounts                                              12,873,603.24                              5,860,054.56

Total                                                                213,941,117.36                             48,007,747.43


(2) Other cash paid related to operation

                                                                                                                          In RMB

                    Item                     Amount occurred in the current period          Occurred in previous period

Administrative expense                                                16,423,062.55                             20,255,645.25

Sales expense                                                          2,130,843.46                             11,139,215.49

Bidding deposit paid                                                  49,915,102.62                            109,314,906.03

Net draft deposit net paid                                           129,561,924.62                            161,663,318.36

Lawsuit freezing funds                                                61,699,121.88

Other trades                                                          16,953,229.98                              4,842,346.84

Total                                                                276,683,285.11                            307,215,431.97


(3) Other cash received related to investment activities

                                                                                                                          In RMB

                    Item                     Amount occurred in the current period          Occurred in previous period

Other investment-related cash received                                       250.00



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Total                                                                             250.00


(4) Other cash received related to financing

                                                                                                                               In RMB

                     Item                         Amount occurred in the current period          Occurred in previous period

B-share repurchase restricted funds
                                                                                                                         39,406.61
recovery

Total                                                                                                                    39,406.61


(5) Other cash paid related to financing activities

                                                                                                                               In RMB

                     Item                         Amount occurred in the current period          Occurred in previous period

Bill of exchange discounted loan margin                                   181,300,000.00                             40,000,000.00

B share repurchase expenses                                                99,998,965.99

Total                                                                     281,298,965.99                             40,000,000.00


59. Supplementary data of cash flow statement

(1) Supplementary data of cash flow statement

                                                                                                                               In RMB

           Supplementary information                   Amount of the Current Term               Amount of the Previous Term

1. Net profit adjusted to cash flow related to
                                                                    --                                       --
business operations:

      Net profit                                                          146,808,358.00                            128,564,198.64

      Plus: Asset impairment provision                                    -74,854,185.26                             -4,369,660.38

            Fixed asset depreciation, gas and
petrol depreciation, production goods                                      11,798,105.97                             11,883,064.96
depreciation

            Amortization of intangible assets                               2,117,631.57                              1,762,127.14

            Amortization of long-term
                                                                              609,394.73                                216,264.82
amortizable expenses

            Loss from disposal of fixed assets,
intangible assets, and other long-term assets                                    1,981.72                                27,108.78
(―-― for gains)

            Loss from fixed asset discard
                                                                              123,770.81                                 30,871.84
(―-― for gains)



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            Loss from fair value fluctuation
                                                                     -9,107.28                              -121,506.67
(―-― for gains)

            Financial expenses (―-― for gains)                49,214,489.55                            49,040,124.14

            Investment losses (―-― for gains)                 -1,542,130.56                            -4,056,397.16

            Decrease of deferred income tax
                                                                10,311,829.50                            -3,881,562.85
asset (―-― for increase)

            Increase of deferred income tax
                                                                -4,365,349.25                               1,956,533.62
asset (―-― for increase)

            Decrease of inventory (―-― for
                                                               -46,192,352.00                            33,483,787.38
increase)

            Decrease of operational receivable
                                                              -135,629,210.99                          -164,044,489.43
items (―-― for increase)

            Increase of operational receivable
                                                              -267,716,203.34                          -351,001,350.74
items (―-― for decrease)

            Others                                             172,337,497.43                           -72,214,117.20

            Cash flow generated by business
                                                              -136,985,479.40                          -372,725,003.11
operations, net

2 Major investment and financing activities
                                                         --                                      --
with no cash involved:

3. Net change in cash and cash equivalents:              --                                      --

      Balance of cash at period end                            612,161,390.04                           380,145,526.85

      Less: Initial balance of cash                            725,269,902.90                           956,190,890.68

      Net increase in cash and cash
                                                              -113,108,512.86                          -576,045,363.83
equivalents


(2) Composition of cash and cash equivalents

                                                                                                                 In RMB

                       Item                        Closing balance                        Opening balance

I. Cash                                                        612,161,390.04                           725,269,902.90

Including: Cash in stock                                             9,534.72                                  4,244.86

          Bank savings can be used at any time                 604,613,893.63                           725,255,753.53

          Other monetary capital can be used at
                                                                 7,537,961.69                                  9,904.51
any time

III. Balance of cash and cash equivalents at
                                                               612,161,390.04                           725,269,902.90
end of term




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60. Assets with restricted ownership or use rights

                                                                                                                          In RMB

                       Item                            Closing book value                             Reason

Monetary capital                                                    444,757,864.32 Margin, litigation freezing, etc.

Inventory                                                            99,936,207.50 Loan by pledge

Fixed assets                                                         64,242,861.97 Loan by pledge

Intangible assets                                                    19,990,230.04 Loan by pledge

100% stake in Fangda Property
                                                                    200,000,000.00 Loan by pledge
Development held by the Company

Investment real estate                                             2,803,546,306.33 Loan by pledge

Other current assets                                                201,790,136.99 Pledge financing

Construction in process                                              31,053,433.16 Loan by pledge

Total                                                              3,865,317,040.31                      --


61. Foreign currency monetary items

(1) Foreign currency monetary items

                                                                                                                          In RMB

                                  Closing foreign currency
               Item                                                    Exchange rate                 Closing RMB balance
                                          balance

Monetary capital                             --                               --                                 43,153,012.17

Including: USD                                     1,061,677.02                       7.079500                     7,516,142.46

        HK Dollar                                 31,198,423.57                       0.913440                   28,497,888.03

INR                                               16,235,911.99                       0.093762                     1,522,311.58

Vietnamese currency                         3,145,709,253.00                          0.000305                         959,709.02

AUD                                                 957,099.92                        4.865700                     4,656,961.08

Account receivable                           --                                              --                  61,443,643.71

Including: USD                                     6,232,954.47                       7.079500                   44,126,201.17

        HK Dollar                                  2,962,103.66                       0.913440                     2,705,703.97

INR                                               13,081,350.14                       0.093762                     1,226,533.55

AUD                                                2,750,931.01                       4.865700                   13,385,205.02

Other receivables                                                                                                  1,575,019.38

Including: USD                                       58,390.31                        7.079500                         413,374.20

HK Dollar                                           272,985.00                        0.913440                         249,355.42

INR                                                9,205,454.91                       0.093762                         863,121.86


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AUD                                                     10,105.00                         4.865700                        49,167.90

Short-term loans                                                                                                      46,253,410.00

Including: Euro                                      5,810,000.00                            7.961000                 46,253,410.00

Other payables                                                                                                           342,772.67

Including: USD                                          12,490.78                         7.079500                        88,428.48

HK Dollar                                              255,721.28                         0.913440                       233,586.04

AUD                                                      4,266.22                         4.865700                        20,758.15

Contract assets                                                                                                        4,239,028.59

Including: USD                                         571,545.98                         7.079500                     4,046,259.77

AUD                                                     39,617.90                         4.865700                       192,768.82

Contract liabilities                                                                                                     624,314.20

Including: USD                                          88,186.20                         7.079500                       624,314.20




(2) The note of overseas operating entities should include the main operation places, book keeping
currencies and selection basis. Where the book keeping currency is changed, the reason should also be
explained.

□ Applicable √ Inapplicable


62. Hedging

Hedging items and related tools, qualitative and quantitative information about hedging risks:

        Type                    Hedged item             Hedging tools                               Hedged risk
 Cash flow hedging Forward transaction of           Aluminum futures       The price of raw materials has risen, leading to an
                       aluminum sheet purchase;     contract;              increase in expected transaction procurement costs;
                       Forward foreign exchange     Forward foreign        Foreign currency depreciation, resulting in a decrease in
                       transactions                 exchange contract      actual receipts


63. Government subsidy

(1) Government subsidy profiles

                                                                                                                                 In RMB

                                                                                                        Amount accounted into the
               Type                           Amount                             Item
                                                                                                            current gain/loss

Major investment project prize
from Industry and Trade
                                                     1,623,809.90         Deferred earning                                28,571.40
Development Division of
Dongguan Finance Bureau


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Distributed PV power
generation project subsidy
sponsored by Dongguan               393,750.17    Deferred earning                            12,499.98
Reform and Development
Commission

Subsidized land transfer            177,278.87    Deferred earning                             1,862.82

Special subsidy for industrial
transformation, upgrading and       800,000.00    Deferred earning                            20,000.01
development

National Industry Revitalization
and Technology Renovation          7,276,754.61   Deferred earning                            61,993.62
Project fund

Enterprise informationization
subsidy project of Shenzhen
                                    468,000.00    Deferred earning                            24,000.00
Small and Medium Enterprise
Service Agency

Shenzhen Science and
Technology Innovation
                                    200,000.00    Deferred earning                            34,980.00
Committee Technology
Innovation Subsidy

Railway transport screen door
controlling system and
                                     77,653.85    Deferred earning                             9,452.16
information transmission
technology subsidy

VAT rebated into revenue           2,649,784.42     Other gains                            2,649,784.42

Subsidies for demonstration
projects supported by building
                                    980,000.00      Other gains                              980,000.00
energy conservation
development funds

Income tax commission               477,506.39      Other gains                              477,506.39

Shenzhen Science and
Technology Innovation
                                    379,000.00      Other gains                              379,000.00
Committee enterprise R&D
funding

Nanchang High-tech Industrial
Development Zone
Management Committee                350,000.00      Other gains                              350,000.00
Science and Technology Bureau
R&D expense subsidy

VAT, income tax rebate              260,464.56      Other gains                              260,464.56



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Employment subsidy                                      227,517.31               Other gains                              227,517.31

Others                                                  696,480.10               Other gains                              696,480.10

Total                                                 17,038,000.18                                                     6,214,112.77


(2) Government subsidy refund

□ Applicable √ Inapplicable


VIII. Change to Consolidation Scope

1. Change to the consolidation scope for other reasons

1. In this period, two subsidiaries directly controlled namely Fangda Qingling and Fangda Cloud Track Company were newly
established and two subsidiaries were added in the current consolidated statement;


IX. Equity in Other Entities

1. Interests in subsidiaries

(1) Group Composition


                                           Registered                                 Shareholding percentage
    Company         Place of business                           Business                                           Obtaining method
                                            address                                  Direct           Indirect

                                                           Designing,
                                                           manufacturing,
Fangda Jianke       Shenzhen            Shenzhen                                          98.39%            1.61% Incorporation
                                                           and installation of
                                                           curtain walls

                                                           Production,
                                                           processing and
Fangda
                    Shenzhen            Shenzhen           installation of                51.00%           49.00% Incorporation
Zhichuang
                                                           subway screen
                                                           doors

                                                           Prodution and
                                                           sales of new-type
                                                           materialsm
Fangda New
                    Nanchang            Nanchang           composite                      75.00%           25.00% Incorporation
Material
                                                           materials and
                                                           production of
                                                           curtain walls

                                                           Real estate
Fangda Property Shenzhen                Shenzhen           development and              100.00%                    Incorporation
                                                           operation


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                                                     Design and
Fangda New
                   Shenzhen         Shenzhen         construction of             99.00%             1.00% Incorporation
Energy
                                                     PV power plants

                                                     Trusted
                                                     processing of
Chengdu Fangda Chengdu              Chengdu                                                       100.00% Incorporation
                                                     building curtain
                                                     wall materials

Shihui
                   Virgin Islands   Virgin Islands   Investment                 100.00%                    Incorporation
International

                                                     Installation and
Dongguan New
                   Dongguan         Dongguan         sales of building                            100.00% Incorporation
Material
                                                     curtain walls

Fangda Property                                      Property
                   Shenzhen         Shenzhen                                                      100.00% Incorporation
Management                                           management

                                                     Real estate
Jiangxi Property
                   Nanchang         Nanchang         development and                              100.00% Incorporation
Development
                                                     operation

                                                     Design and
Luxin New
                   Pingxiang        Pingxiang        construction of                              100.00% Incorporation
Energy
                                                     PV power plants

                                                     Design and
Xinjian New
                   Nanchang         Nanchang         construction of                              100.00% Incorporation
Energy
                                                     PV power plants

                                                     Design and
Dongguan New
                   Dongguan         Dongguan         construction of                              100.00% Incorporation
Energy
                                                     PV power plants

Kechuangyuan                                         Software
                   Shenzhen         Shenzhen                                                      100.00% Incorporation
Software                                             development

Zhichuang
                                                     Metro screen
Technology Hong Hong Kong           Hong Kong                                                     100.00% Incorporation
                                                     door
Kong

Hongjun
Investment         Shenzhen         Shenzhen         Investment                  98.00%             2.00% Incorporation
Company

                                                     Designing,
Fangda Australia                                     manufacturing,
                   Australia        Australia                                                     100.00% Incorporation
Co., Ltd.                                            and installation of
                                                     curtain walls

                                                     Intelligent
Fang Qingling      Shanghai         Shanghai                                     30.00%            70.00% Incorporation
                                                     technology, new



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                                                        energy,
                                                        automated
                                                        technology

                                                        Design,
                                                        development and
Fangda Cloud
                    Shenzhen          Shenzhen          sales of cloud rail                                  100.00% Incorporation
Rail
                                                        transport
                                                        equipment

                                                        Building
Chengda Curtain                                         decoration and
                    Chengdu           Chengdu                                                                100.00% Incorporation
Wall Company                                            other construction
                                                        industry

                                                        Designing,
Fangda Southeast                                        manufacturing,
                    Vietnam           Vietnam                                                                100.00% Incorporation
Asia                                                    and installation of
                                                        curtain walls

                                                        Construction
                                                        technology,
                                                        intelligent
                                                        technology,
                                                        automation
Fangda Jianzhi      Shanghai          Shanghai          technology,                                          100.00% Incorporation
                                                        design,
                                                        production and
                                                        installation of
                                                        building curtain
                                                        walls

Zhongrong Litai     Shenzhen          Shenzhen          Business service                                      55.00% Purchase

                                                        Designing,
Jianke Hong                                             manufacturing,
                    Hong Kong         Hong Kong                                                              100.00% Incorporation
Kong                                                    and installation of
                                                        curtain walls

Others:
Jianke Hong Kong Company has a registered capital of 40,000.00 Hong Kong dollars, and Shihui International Company paid up its
capital on May 19, 2020.


(2) Major non wholly-owned subsidiaries

                                                                                                                                 In RMB

                                                                                      Dividend to be              Interest balance of
                           Shareholding of minority Profit and loss attributed
          Company                                                                  distributed to minority     minority shareholders in
                                 shareholders        to minority shareholders
                                                                                        shareholders             the end of the period


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Zhongrong Litai                                      45.00%                            -31,526.57                                                   48,378,483.03


(3) Financial highlights of major non wholly owned subsidiaries

                                                                                                                                                              In RMB

                                       Closing balance                                                                Opening balance
Compan                  Non-curr                               Non-curr                               Non-curr                                Non-curr
             Current                   Total of Current                        Total       Current                   Total of   Current                       Total
    y                      ent                                    ent                                    ent                                     ent
              asset                    assets    liabilities                 liabilities    asset                     assets    liabilities                 liabilities
                          assets                               liabilities                              assets                                liabilities

Zhongro 205,490, 30,064.0 205,520, 98,013,1                                   98,013,1 174,827, 30,066.1 174,857, 67,279,4                                  67,279,4
ng Litai      834.99               6    899.05       58.99                       58.99      165.52               2     231.64       32.54                       32.54

                                                                                                                                                              In RMB

                            Amount occurred in the current period                                              Occurred in previous period

                                                                             Business                                                                  Business
  Company                                            Total of misc.                                                              Total of misc.
                  Turnover             Net profit                            operation        Turnover           Net profit                            operation
                                                        incomes                                                                     incomes
                                                                             cash flows                                                                cash flows

Zhongrong
                      229,334.85        -70,059.04      -70,059.04            -11,053.19                         -143,071.56       -143,071.56                  19.69
Litai


2. Interests in joint ventures or associates

(1) Financial summary of insignificant joint ventures and associates

                                                                                                                                                              In RMB

                                                       Closing balance/amount occurred in this                       Opening balance/amount occurred in
                                                                               period                                           previous period

Associate:                                                                        --                                                    --

Total book value of investment                                                              56,847,038.74                                           57,222,240.83

Total shareholding                                                                --                                                    --

Net profit                                                                                    -375,202.09                                              -325,733.55

Total of misc. incomes                                                                        -375,202.09                                              -325,733.55


X. Risks of Financial Tools

        The risks associated with the financial instruments of the Company arise from the various financial assets and liabilities
recognized by the Company in the course of its operations, including credit risks, liquidity risks and market risks.

        The management objectives and policies of various risks related to financial instruments are governed by the management of
the company. The operating management is responsible for daily risk management through functional departments (for example, the
company reviews the company's credit sales on a case-by-case basis). The internal audit department of the company conducts daily
supervision of the implementation of the company's risk management policies and procedures, and reports relevant findings to the


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company's audit committee in a timely manner.

       The overall goal of the company's risk management is to formulate risk management policies that minimize the risks
associated with various financial instruments without excessively affecting the company's competitiveness and resilience.

       1. Credit risk

       Credit risk is caused by the failure of one party of a financial instrument in performing its obligations, causing the risk of
financial loss for the other party. The credit risk of the company mainly arises from currency funds, receivables, receivables, contract
assets, other receivables and long-term receivables. The credit risk of these financial assets is derived from the counterparty default
and the maximum exposure is equal to the carrying amount of these instruments.

       The company's money and funds are mainly deposited in the commercial banks and other financial institutions. The company
believes that these commercial banks have higher reputation and asset status and have lower credit risk.

       For receivables and contract assets, the Group sets up related policies to control the credit risk. The Group set the credit line
and term for debtors according to their financial status, external rating, and possibility of getting third-party guarantee, credit record
and other factors. The Group regularly monitors debtors’ credit record. For those with poor credit record, the Group will send written
payment reminders, shorten or cancel credit term to lower the general credit risk.

       (1) Significant increases in credit risk

       The credit risk of the financial instrument has not increased significantly since the initial confirmation. In determining whether
the credit risk has increased significantly since the initial recognition, the Company considers reasonable and evidenced information,
including forward-looking information, that can be obtained without unnecessary additional costs or effort. The Company determines
the relative risk of default risk of the financial instrument by comparing the risk of default of the financial instrument on the balance
sheet date with the risk of default on the initial recognition date to assess the credit risk of the financial instrument from initial
recognition.

       When triggering one or more of the following quantitative and qualitative criteria, we believe that the credit risk of the
financial instruments has increased significantly: The quantitative criterion is mainly that the probability of default in the remaining
period of the reporting date has increased by more than a certain proportion from the initial confirmation; The qualitative criteria are
significant adverse changes in the operation or financial situation of the principal debtor.

       (2) Definition of assets where credit impairment has occurred

       In order to determine whether or not credit impairment occurs, the standard adopted by our company is consistent with the
credit risk management target for related financial instruments, and quantitative and qualitative indicators are considered.

       Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor, such as payment of
interest or default or overdue of principal; (B) The concession that the debtor would not make under any other circumstances for
economic or contractual considerations relating to the financial difficulties of the debtor; The debtor is likely to be bankrupt or
undertake other financial restructuring; The financial difficulties of the issuer or debtor lead to the disappearance of the active market
for the financial asset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a credit loss has
occurred.

       Credit impairment in financial assets may be caused by a combination of multiple events, not necessarily by events that can be
identified separately.

       (3) Expected credit loss measurement

       Depending on whether there is a significant increase in credit risk and whether a credit impairment has occurred, the Company
prepares different assets for a 12-month or full expected credit loss. The key parameters of expected credit loss measurement include


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default probability, default loss rate and default risk exposure. Taking into account the quantitative analysis and forward-looking
information of historical statistics (such as counterparty ratings, guaranty methods, collateral categories, repayment methods, etc.),
the Company establishes the default probability, default loss rate and default risk exposure model.

       Definition:

       The probability of default refers to the possibility that the debtor will not be able to fulfil its obligation to pay in the next 12
months or throughout the remaining period.

       Breach Loss Rate means the extent of loss expected by the Company for breach risk exposure. Depending on the type of
counterparty, the manner and priority of recourse, and the different collateral, the default loss rate is also different. The default loss
rate is the percentage of the risk exposure loss at the time of the default, calculated on the basis of the next 12 months or the entire
lifetime.

       Exposure to default is the amount payable to the Company at the time of default in the next 12 months or throughout the
remaining life. Prospective information credit risks significantly increased and expected credit losses were calculated. Through the
analysis of historical data, the company has identified the key economic indexes that affect the credit risk of each business type and
the expected credit loss.

       The largest credit risk facing the Group is the book value of each financial asset on the balance sheet. The Group makes no
guarantee that may cause the Group credit risks.

       Among the Group’s receivables and contract assets, accounts receivable and contract assets from top 5 customers account for
21.76% of the total accounts receivable (2019: 17.66%); among other receivables, other receivables from top 5 customers account for
66.38% of the total other receivables (2019: 71.29%).

       2. Liquidity risk

       Liquidity risk is the risk of capital shortage when the Group needs to pay cash or settled with other financial assets. The
company is responsible for the cash management of its subsidiaries, including short-term investments in cash surpluses and loans to
meet projected cash requirements. The company's policy is to regularly monitor short and long-term liquidity requirements and
compliance with borrowing agreements to ensure adequate cash reserves and readily available securities.

The maturity period of the company's financial liabilities at the end of the period is as follows:

                                                                                                                  Contract amount: RMB
                                                                                    30 June 2020
                     Item
                                              Less than 1 year       Within 1-3 years       Over 3 years                  Total
Short-term loans                                       128,063.57                                                              128,063.57
Notes payable                                            53,147.84                                                                53,147.84
Account payable                                        107,744.79             1,999.77                 915.19                  110,659.75
Employees' wage payable                                   2,459.35                                                                  2,459.35
Other payables                                           62,815.19            2,222.97                6,186.23                    71,224.39
Non-current liabilities due in 1 year                    15,161.78                                                                15,161.78
Other current liabilities                                 5,954.40                76.93                 98.52                       6,129.85
Long-term loans                                               0.00           24,991.15               90,125.00                    115,116.15
Total liabilities                                      375,346.92            29,290.82               97,324.94                 501,962.68

The expiry period of the company's financial liabilities is as follows:

                                                                                                                  Contract amount: RMB

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                                                                             31 December 2019
               Item
                                        Less than 1 year          Within 1-3 years         Over 3 years                    Total
Short-term loans                                    72,461.82                        -                        -                     72,461.82
Notes payable                                       57,881.60                        -                        -                     57,881.60
Account payable                                    118,979.57                   0.97                      96.79                    119,077.33
Employees' wage payable                              5,584.71                        -                        -                      5,584.71
Other payables                                      68,410.66              1,170.99                    561.59                       70,143.24
Non-current liabilities due in 1                    92,234.66                        -                        -                     92,234.66
year
Other current liabilities                           18,169.46                        -                        -                     18,169.46
Long-term loans                                               -           39,650.15                 15,000.00                       54,650.15
Total liabilities                                  433,722.48             40,822.11                 15,658.38                      490,202.97

       3. Market risks and measures

       (1) Credit risks

       The exchange rate risk of the company mainly comes from the assets and liabilities of the company and its subsidiaries in
foreign currency not denominated in its functional currency. Except for the use of Hong Kong dollars, United States dollars,
Australian dollars, Vietnamese shields, Indian rupees or Singapore currencies by its subsidiaries established in and outside the Hong
Kong Special Administrative Region, other major businesses of the Company shall be denominated in Renminbi.

       As of June 30, 2020, the foreign currency financial assets and foreign currency financial liabilities of the company at the end
of the period are listed in the description of foreign currency monetary items in section VII. 61.

       The company pays close attention to the impact of exchange rate changes on the company's exchange rate risk. The company
continuously monitors the scale of foreign currency transactions and foreign currency assets and liabilities to minimize foreign
exchange risks. To this end, the Company may avoid foreign exchange risks by signing forward foreign exchange contracts or
currency swap contracts.

       (2) Exchange rate risk

       The Group's interest rate risk mainly arises from long-term interest-bearing debts such as long-term bank loans. Financial
liabilities with floating interest rate cause cash flow interest rate risk for the Group. Financial liabilities with fixed interest rate cause
fair value interest rate risk for the Group. The Group decides the proportion between fixed interest rate and floating interest rate
according to the market environment and regularly reviews and monitors the combination of fixed and floating interest rate
instruments.

       The company's finance department continuously monitors the company's interest rate level. The rising interest rate will
increase the cost of the new interest-bearing debt and the interest expenditure on interest-bearing debt which has not yet been paid by
the company at the floating rate, and will have a significant adverse effect on the company's financial performance. Management will
make adjustments in time according to the latest market conditions.
       As of June 30, 2020, the current floating interest rate borrowings of 2.049 billion yuan, while other risk variables remain
unchanged, if the borrowing rate calculated at the floating interest rate rises or falls by 50 basis points, the company's net profit for
the year will be Will decrease or increase 7,685,300 yuan.




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XI. Fair Value

1. Closing fair value of assets and liabilities measured at fair value

                                                                                                                                  In RMB

                                                                           Closing fair value
           Item
                                First level fair value     Second level fair value       Third level fair value           Total

1. Continuous fair value
                                          --                          --                           --                       --
measurement

(1) Transactional financial
                                           1,815,676.34                                           18,005,336.72          19,821,013.06
assets

1. Financial assets
measured at fair value
with variations accounted                  1,815,676.34                                           18,005,336.72          19,821,013.06
into current income
account

(1) Investment in equity
                                                                                                  18,005,336.72          18,005,336.72
tools

(2) Derivative financial
                                           1,815,676.34                                                                   1,815,676.34
assets

(2) Receivable financing                                                                                300,000.00          300,000.00

(3) Investment in other
                                                                                                  20,140,037.85          20,140,037.85
equity tools

(4) Investment real estate                                        5,517,829,915.07                                    5,517,829,915.07

 1. Leased building                                               5,517,829,915.07                                    5,517,829,915.07

(5) Other non-current
                                                                                                    5,018,835.30          5,018,835.30
financial assets

Total assets measured at
                                           1,815,676.34           5,517,829,915.07                43,464,209.87       5,563,109,801.28
fair value continuously


2. Recognition basis of market value of continuous and discontinuous items measured at first level fair
value

The Group determines the fair value using quotation in an active market for financial instruments traded in an active market;


3. Valuation technique and qualitative and quantitative information for key parameters of continuous and
discontinuous second level fair value items

For investment in real estate similar with real estate transaction, the Group uses valuation techniques to determine its fair value. The
technique is comparison and earning method. Inputs include transaction date, status, region and other factors.



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4. Valuation technique and qualitative and quantitative information for key parameters of continuous and
discontinuous third level fair value items

If there is no active market, the Company uses evaluation techniques to determine the fair value. The valuation models are mainly
cash flow discount model and market comparable company model. The input value of valuation technology mainly includes risk-free
interest rate, benchmark interest rate, exchange rate, credit point difference, liquidity premium, lack of liquidity discount, etc.


5. Switch between different levels, switch reason and switching time policy

The company takes the occurrence date of the events leading to the transition between levels as the time point to confirm the
transition between levels. In the period, there is no switch in the financial assets measured at fair value between the first and second
level or transfer in or out of the third level.


6. Fair value of financial assets and liabilities not measured at fair value

Financial assets and liabilities measured at amortized cost include: monetary capital, bills receivable, accounts receivable, other
receivables, short-term borrowings, notes payable, accounts payables, other payables, and long-term payables.
The difference between book value and fair value of financial assets and liabilities not measured at fair value is small.


XII. Related Parties and Transactions

1. Parent of the Company


                                                                         Registered capital   Share of the parent   Voting power of the
        Parent            Registered address            Business
                                                                         (in RMB10,000)       co. in the Company      parent company

Shenzhen Banglin
Technologies
                        Shenzhen                  Industrial investment 3,000.00                           10.55%                 10.55%
Development Co.,
Ltd.

Shengjiu Investment
                        Hong Kong                 Industrial investment HKD1.00                             9.57%                     9.57%
Ltd.

Particulars about the parent of the Company
(1) All of the investors of Shenzhen Banglin Technology Development Co., Ltd., the holding shareholder of the Company, are natural
persons. Among them, Chairman Xiong Jianming is holding 85% shares, and Mr. Xiong Xi – son of Mr. Xiong Jianming, is holding
15% of the shares.
(2) Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. are
acting in concert. The Company is not notified of other action-in-concert or related parties among the other holders of current shares.
The final controller of the Company is Xiong Jianming.


2. Subsidiaries of the Company

For details of the company’s subsidiaries, please refer to Section IX. 1. Equity in subsidiaries.




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3. Joint ventures and associates

For the important joint ventures or joint ventures of this enterprise, please refer to section IX. 2. Rights and interests in joint venture
arrangements or joint ventures.
Information about other joint ventures or associates with related transactions in this period or with balance generated by related
transactions in previous period:

                            Joint venture or associate                                        Relationship with the Company

Shenzhen Ganshang Joint Investment Co., Ltd. (Shenzhen Ganshang)               Associate


4. Other associates


                            Other related parties                                          Relationship with the Company

Ganshang Joint Investment                                                  Associate

Jiangxi Business Innovative Property Joint Stock (Jiangxi Business
                                                                           Associate
Inovation)

Shenzhen Qijian Technology Co., Ltd. (Qijian Technology)                   Common actual controller

Shenyang Fangda Semi-conductor Lighting Co., Ltd. (hereinafter
                                                                           Subsidiary in liquidation
Shenyang Fangda)

Shenzhen Woke Semi-conductor Lighting Co., Ltd. (hereinafter
                                                                           Subsidiary in liquidation
Shenzhen Woke)

Gong Qing Cheng Shi Li He Investment Management Partnership                Affiliated relationship with Shenzhen Banglin Technology
Enterprise (limited partner)                                               Development Co., Ltd.

Director, manager and secretary of the Board                               Key management


5. Related transactions

(1) Related transactions for purchase and sale of goods, provision and acceptance of services

Sales of goods and services
                                                                                                                                    In RMB

                                                                        Amount occurred in the
         Affiliated party                  Related transaction                                           Occurred in previous period
                                                                             current period

                                     Property service and sales of
Qijian Technology                                                                          25,261.82                            22,610.18
                                     goods

                                     Property service and sales of
Ganshang Joint Investment                                                                                                         5,060.89
                                     goods


(2) Related leasing

The Company is the leasor:


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                                                                                                                            In RMB

        Name of the leasee        Category of asset for lease       Rental recognized in the period Rental recognized in the period

Qijian Technology               Houses & buildings                                      207,366.00                      207,366.00

Ganshang Joint Investment       Houses & buildings                                                                       66,475.80


(3) Related guarantees

The Company is the guarantor:
                                                                                                                            In RMB

    Beneficiary party        Amount guaranteed              Start date                  Due date               Completed or not

Fangda Jianke                      300,000,000.00 28 August 2018                2020.07.31                No

Fangda Jianke                      100,000,000.00 21 June 2019                  2020.06.20                No

Fangda Property                  1,350,000,000.00 25 February 2020              24 February 2020          No

Fangda Jianke                      250,000,000.00 20 August 2019                2020.08.19                No

Fangda Jianke                      600,000,000.00 24 February 2020              13 February 2021          No

Fangda Jianke                      300,000,000.00 1 August 2019                 2020.07.31                No

Fangda Jianke                      400,000,000.00 17 April 2019                 2020.04.17                No

Fangda Zhichuang                   216,000,000.00 6 August 2018                 2020.07.12                No

Fangda Zhichuang                   150,000,000.00 27 May 2019                   2020.05.27                No

Fangda Zhichuang                   200,000,000.00 16 June 2020                  13 February 2021          No

Fangda Zhichuang                   200,000,000.00 1 August 2019                 2020.07.31                No

Fangda Zhichuang                       30,000,000.00 29 June 2020               23 June 2020              No

Fangda New Material                    65,000,000.00 23 May 2020                22 May 2021               No

Fangda New Material                    80,000,000.00 24 April 2019              2020.04.23                No

Fang Qingling                          80,000,000.00 10 July 2019               2024.07.10                No

Jiangxi Property
                                   200,000,000.00 19 June 2019                  2023.06.23                No
Development

Fangda Jianke and
                                   140,000,000.00 18 December 2019                                        No
Fangda Zhichuang

Total                            4,661,000,000.00

The Company is the guarantied party:
                                                                                                                            In RMB

         Guarantor           Amount guaranteed              Start date                  Due date               Completed or not

Fangda Jianke                      500,000,000.00 26 March 2019                 2020.03.26                No

Fangda Jianke, Fangda
                                   100,000,000.00 26 March 2019                 2021.3.20                 No
New Energy



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Note to related guarantees
      1. The above-mentioned guarantees are all associated guarantees within interested entities of the Group.
      2. HSBC has a total credit of RMB 90 million to the Company, Fangda Jianke and Fangda Zhichuang and has not yet agreed on
the credit expiration date. HSBC regularly evaluates the credit status. The restriction on the use of the credit is as follows:
      The company can use non-financial bank guarantees of up to 90 million yuan to grant credit;
      Fangda Jianke has non-committed combined revolving credits of not more than RMB90 million including revolving loans of
up to RMB90 million, non-financial bank guarantees of up to RMB90 million and bank acceptances of up to RMB90 million.
      Fangda Jianke has non-committed combined revolving credits of not more than RMB140 million including revolving loans of
up to RMB50 million, non-financial bank guarantees of up to RMB140 million and bank acceptances of up to RMB140 million.
      (3) Xingye Bank total credit to this company, Fangda Jianke company, Zhixin technology company 900 million yuan, of which
Fangda Jianke company no more than 400 million yuan, Zhixin technology company no more than 12 million yuan, the company no
more than 600 million yuan.


(4) Remuneration of key management

                                                                                                                                    In RMB

                     Item                        Amount occurred in the current period              Occurred in previous period

Directors, supervisors and senior
                                                                                3,921,960.54                                4,251,796.50
management


6. Receivable and payables due with related parties

(1) Receivable interest

                                                                                                                                    In RMB

                                                              Closing balance                             Opening balance
       Project              Affiliated party     Remaining book                                Remaining book
                                                                      Bad debt provision                             Bad debt provision
                                                      value                                          value

Account receivable     Qijian Technology                   1,230.45                   10.58               1,212.89                   12.13

Other receivables      Shenyang Fangda                    42,877.00               42,877.00             42,877.00                 42,877.00

Other receivables      Shenzhen Woke                     867,442.94              867,442.94            867,442.94             867,442.94

                       Ganshang Joint
Other receivables                                      5,015,089.25               74,724.83          5,015,089.25                 74,724.83
                       Investment


XIII. Share Payment

1. Overall share payment

□ Applicable √ Inapplicable




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2. Share payment settled by equity

□ Applicable √ Inapplicable


3. Share payment settled by cash

□ Applicable √ Inapplicable


4. Revising and termination of share payment

None


XIV. Commitment and Contingent Events

1. Major commitments

      Major commitments that exist on the balance sheet day
      Major commitments that exist on the balance sheet day
      On November 6, 2017, Fangda Real Estate Co., Ltd., a subsidiary of the Company, and Bangshen Electronics (Shenzhen) Co.,
Ltd. signed the ―Joint Development Agreement on Fangda Bangshen Industrial Park (Temporary Name) Urban Renewal Project‖,
and the two parties agreed to develop cooperatively. In order to develop urban renewing projects such as a ―renovation project‖,
Fangda Real Estate provided Party A with property compensation through renovating and renovating the property allocation terms
agreed upon by both parties, and obtained independent development rights of the project. As of June 30, 2020, Fangda Real Estate
Co., Ltd. had paid a security deposit of RMB 20 million.
      (2) In July 2018 ,the company's subsidiary Fangda Real Estate Co. Ltd. (Party A) signed a contract with Shenzhen Yikang Real
Estate Co. Ltd. (Party B1) and Shenzhen Qianhai Zhongzheng Dingfeng No. 6 Investment Enterprise (Limited Partnership) (Party
B2), "Shenzhen Henggang Dakang Village Project Cooperation Agreement". Party B agrees to transfer the entire equity of the project
company it holds and the entire development interest of the project to Party A. Party A shall pay Party B a total of RMB600 million
for the cooperation price. As of June 30, 2020, Fangda Real Estate Company had paid a deposit of RMB 50 million to Party B and
the project company, and had paid a service fee of RMB 20 million.
      As of June 30, 2020, the Group did not have other commitments that should be disclosed.


2. Contingencies

(1) Significant contingencies on the balance sheet date

(1) Contingent liabilities formed by material lawsuit or arbitration, and their influences on the financial position


Notes:

     In November 2018, Fangda Jianke a subsidiary of the Group sued Fujian Huapu Real Estate Development Co. Ltd. for a
payment of RMB 13810243.67 and its overdue interest payment of RMB 373,380.16 totaling RMB 14,183,623.83 to the Taijiang
District People's Court of Fuzhou City. On 10 May 2019, the court ruled against the prosecution; On 16 May 2019, Fang Da Jianke
filed an appeal; On 26 August 2019, the court of second instance ordered the court of first instance to revoke the first instance
decision; On 8 October 2019, it was sent back to the court of first instance, case number: (2019) Min 0103 Republic of China 4282.
In April 2020, Huapu Company filed a counterclaim application to the court, requesting Fangda Jianke Company to pay a total of
12,746,000.00 yuan for the construction period and quality. As of the date of this report, the two cases are still under trial and have
not yet been judged.
     2. In December 2019, Fangda Construction Company sued the construction party Zhejiang Jiayue Industrial Co., Ltd. to the
People's Court of Keqiao District, Shaoxing City for payment of 20,158,046.00 yuan for the construction of Shaoxing Jiayue Plaza


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project, temporarily 4,660,400.00 yuan, return of performance bond 3,699,100.00 yuan, compensation for losses 2,144,400.00 yuan,
a total of 30,661,946.00 yuan. Thereafter, Fang Da Jianke increased the number of claims, totalling 30,727,401.26 yuan. In March
2020, Jiayue Company filed a counterclaim with the court, demanding Fangda Construction Company to pay a penalty of RMB
369,899.98 for the construction period, RMB 13,529,427.00 for quality maintenance, and a compensation of RMB 22,193,998.74 for
breach of contract damages, deducting a performance bond of RMB 3,699,100.00, and a fine of RMB 52,500.00 for a total of
39,844,925.72 yuan. The two parties separately initiated project cost appraisal and project quality appraisal. As of the date of this
report, the two cases are still under trial and have not yet been judged.
      3. Langfang Aomei Foundation Real Estate Development Co., Ltd. filed a lawsuit with the court on June 19, 2019, requesting
Fangda Construction Company to pay a total of 19,721,315.00 yuan for the construction period and quality penalty, and on December
26, 2019, the quality, restoration cost and unfinished Project cost appraisal application; Fangda Jianke filed a counterclaim on
September 11, 2019, demanding that Aomei Company pay the total amount of 13,939,863.27 yuan for the construction cost,
liquidated damages, and compensation losses. On November 22, 2019, it filed the completed project cost appraisal application. As of
the date of this report, the case is still in the appraisal process.
      4. Shenzhen Qianhai Guohong Mobile Information Technology Co., Ltd. filed a lawsuit with Shenzhen Nanshan District
People's Court in January 2020 to require Fangda Property to pay a total of RMB13,231,913.00 for breach of contract overdue
certification. As of the reporting date, the case has not yet been judged.
      5. Shenzhen Fangcheng Teaching Equipment Co., Ltd. filed a lawsuit with Shenzhen Nanshan District People's Court in
February 2020 to terminate the house purchase contract signed with Fangda Property, return the purchase price of RMB7,240,752.00,
and pay the total amount of liquidated damages of RMB 10,203,715.00 for overdue certification. As of the reporting date, the case
has not yet been heard.


(2) Pending major lawsuits
     On September 10 2018, the People's Court of Lixia District of Jinan City sentenced Shandong Zhonghong Real Estate Co. Ltd.
to the Company for payment of 5960429.45 yuan within 10 days from the date of the effective date of the (2018) Lu 0102 Minchu
5367 civil judgment. (2019) The Civil Judgment No. 1Lu01 Minchu 2023 ruled that Shandong Zhonghong Real Estate Co., Ltd. shall
pay 18,804,914.46 yuan and interest to Fangda Construction Company within ten days from the effective date of the judgment, and
enjoy the priority of compensation. As of the date of this report, Zhonghong Company has entered the bankruptcy liquidation stage.
The company has declared the creditor's rights of the above two judgments and has not received the relevant funds.

(3) Contingent liabilities formed by providing of guarantee to other companies’ debts and their influences on financial situation

       As of June 30, 2020, the Company provided guarantees for the following unit loans:
    Name of guaranteed entity                   Guarantee              Amount (in RMB10,000)                  Term
Fangda Property                        Pledge/mortgage                              99,000.00        2020/3/13 to 2030/3/13
                                       guarantee
Fangda Jianke                          Guarantee                                     5,000.00       2020/02/26 to 2021/01/31
Fangda Jianke                          Guarantee                                     4,500.00       2020/05/20 to 2021/01/15
Fangda Jianke                          Guarantee                                     5,000.00       2020/01/02 to 2021/01/02
Fangda Zhichuang                       Guarantee                                     5,000.00       2020/02/26 to 2021/01/31
Fangda Zhichuang                       Guarantee                                     1,600.00         2019/8/7 to 2020/8/6
Fangda Zhichuang                       Guarantee                                     3,000.00       2020/06/29 to 2021/06/23
Fangda Property                        Warranty/mortgage                             2,500.00        2019/7/22 to 2023/7/22
                                       guarantee
Fangda Property                        Warranty/mortgage                             2,500.00        2019/9/12 to 2023/7/22



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                                    guarantee
Fangda Property                     Warranty/mortgage                             3,000.00           2019/9/26 to 2023/7/22
                                    guarantee
Fangda Property                     Warranty/mortgage                             2,000.00           2019/9/29 to 2023/7/22
                                    guarantee
Fangda Property                     Warranty/mortgage                             5,000.00          2019/10/31 to 2023/7/22
                                    guarantee
Fangda Property                     Warranty/mortgage                             4,000.00          2020/03/11 to 2023/7/22
                                    guarantee
Fang Qingling                       Warranty/mortgage                               723.78           2019/7/31 to 2024/7/10
                                    guarantee
Fang Qingling                       Warranty/mortgage                               586.24           2019/8/27 to 2024/7/10
                                    guarantee
Fang Qingling                       Warranty/mortgage                                211.98          2019/9/27 to 2024/7/10
                                    guarantee
Fang Qingling                       Warranty/mortgage                               892.92          2019/11/18 to 2024/7/10
                                    guarantee
Fang Qingling                       Warranty/mortgage                               837.41          2019/12/20 to 2024/7/10
                                    guarantee
Fang Qingling                       Warranty/mortgage                               838.81         2020/01/15 to 2024/07/10
                                    guarantee
Fangda Group                        Guarantee                                     8,000.00           2019/3/26 to 2021/3/20
Fangda Group                        Mortgage guarantee                           20,000.00         2020/03/02 to 2021/02/28
                Total                                                           174,191.14

Note: (1) Contingent liabilities caused by guarantees provided for other entities are all related guarantees between interested entities
in the Group.
(2) The Group’s property business provides periodic mortgage guarantee for property purchasers. The term of the periodic guarantee
lasts from the effectiveness of guarantee contracts to the completion of mortgage registration and transfer of housing ownership
certificates to banks. By 30 June 2020, the Company has provided periodic guarantee of RMB492,341,700.
On 30 June 2020, the Company has no other contingent events that should be disclosed.


(2) Significant contingent events that do not need to be disclosed should be explained

No such significant contingent event


3. Others

As of June 30, 2020:
           Currency             Guarantee balance (original            Deposit (RMB)                  Credit line used (RMB)
                                          currency)
RMB yuan                                      529,151,563.44                        717,500.00                       528,434,063.44
INR                                             88,699,949.00                                                           8,316,684.62


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HK $(HKD)                                         15,349,982.00                                                         14,021,287.56
United States dollars (USD)                        8,649,642.54                    5,668,461.72                         55,566,682.64
              Total                                                                6,385,961.72                        606,338,718.26


XV. Post-balance-sheet events

None

XVI. Other material events

1. Segment information

(1) Recognition basis and accounting policy for segment report

The Group divides its businesses into five reporting segments. The reporting segments are determined based on financial information
required by routine internal management. The Group’s management regularly review the operating results of the reporting segments
to determine resource distribution and evaluate their performance.

The reporting segments are:

(1) Curtain wall segment, production and sales of curtain wall materials, construction curtain wall design, production and installation;

(2) Rail transport segment: assembly and processing of metro screen doors;

(3) Real estate segment: development and operating of real estate on land of which land use right is legally obtained by the Company;
property management;

(4) New energy segment: photovoltaic power generation, photovoltaic power plant sales, photovoltaic equipment R & D, installation,
and sales, and photovoltaic power plant engineering design and installation

(5) Others

The segment report information is disclosed based on the accounting policies and measurement standards used by the segments when
reporting to the management. The policies and standards should be consistent with those used in preparing the financial statement.


(2) Financial information

                                                                                                                               In RMB

                                                                                                      Offset between
      Item            Curtain wall    Rail transport   Real estate    New energy         Others                             Total
                                                                                                         segments

                                                                                                                        1,251,608,064.
Turnover         843,816,163.62 333,462,675.90 60,051,984.40 10,091,179.07 13,111,787.37                8,925,725.94
                                                                                                                                     42

Including:
external                                                                                                                1,251,608,064.
                 841,699,185.33 333,462,675.90 58,349,363.38          9,727,737.59     8,369,102.22
transaction                                                                                                                          42
income

Inter-segment          2,116,978.29                    1,702,621.02     363,441.48     4,742,685.15     8,925,725.94                0.00



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transaction
income

Including:
                                                                                                                                 1,199,257,200.
major business 834,247,195.86 332,479,644.40 24,505,244.14 10,091,179.07                               0.00      2,066,062.50
                                                                                                                                            97
turnover

Operation cost 701,739,016.13 245,566,557.91 21,785,200.61                  3,608,837.41        151,219.77       2,480,419.77 970,370,412.06

Including:
external            701,375,574.65 243,449,579.62 21,785,200.61             3,608,837.41        151,219.77                       970,370,412.06
transaction cost

Cost                   363,441.48      2,116,978.29                                                              2,480,419.77              0.00

Including:
major business 697,304,141.14 245,365,878.41 18,478,958.78                  3,608,837.41               0.00      2,480,419.77 962,277,395.97
cost

                    4,987,537,814.                    6,703,022,282.                       3,961,945,536. 5,124,238,402. 11,481,781,127
Total assets                         786,110,214.67                       167,403,681.71
                               97                                    78                                 10                 56               .67

                    3,602,397,272.                    4,281,233,329.                       1,715,194,487. 3,926,709,504. 6,256,626,582.
Total liabilities                    509,624,610.93                        74,886,385.86
                               93                                    32                                 39                 20               23


(3) Others

Since more than 90% of the Group’s revenue comes from Chinese customer and 90% of the Group’s assets are in China, no detailed
regional information is needed.


XVII. Notes to Financial Statements of the Parent

(1) Account receivable

(1) Account receivable disclosed by categories

                                                                                                                                        In RMB

                                            Closing balance                                             Opening balance

                          Remaining book                                              Remaining book
                                                 Bad debt provision                                           Bad debt provision
           Type                value                                      Book             value
                                                                                                                                    Book value
                                     Proportio            Provision       value                 Proportio              Provision
                         Amount                  Amount                               Amount                Amount
                                        n                     rate                                 n                      rate

Including:

Account receivable
for which bad debt        871,303.                                    864,942.7 301,522.4
                                     100.00% 6,360.61         0.73%                             100.00% 3,708.73          1.23% 297,813.76
provision is made by           34                                                 3         9
group




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Including:

Other business             871,303.                                   864,942.7 301,522.4
                                      100.00% 6,360.61        0.73%                          100.00% 3,708.73           1.23% 297,813.76
payment                          34                                           3          9

                           871,303.                                   864,942.7 301,522.4
Total                                 100.00% 6,360.61        0.73%                          100.00% 3,708.73           1.23% 297,813.76
                                 34                                           3          9

Provision for bad debts by combination:
                                                                                                                                       In RMB

                                                                                Closing balance
               Name
                                           Remaining book value               Bad debt provision                     Provision rate

Other business payment                                    871,303.34                            6,360.61                                0.73%

Total                                                     871,303.34                            6,360.61                   --

If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Inapplicable
Account age
                                                                                                                                       In RMB

                                  Age                                                             Closing balance

Within 1 year (inclusive)                                                                                                       871,303.34

Total                                                                                                                           871,303.34


(2) Bad debt provision made, returned or recovered in the period

Bad debt provision made in the period:
                                                                                                                                       In RMB

                                                                      Change in the period
        Type            Opening balance                       Written-back or                                              Closing balance
                                              Provision                              Canceled               Others
                                                                  recovered

Combination 3:
Other business                  3,708.73           2,651.88                                                                           6,360.61
models

Total                           3,708.73           2,651.88                                                                           6,360.61


(3) Balance of top 5 accounts receivable at the end of the period

                                                                                                                                       In RMB

                                        Closing balance of accounts                                        Balance of bad debt provision at
               Entity                                                           Percentage (%)
                                                receivable                                                      the end of the period

Top five summary                                          638,638.30                              73.30%                              4,662.05



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Total                                                    638,638.30                             73.30%


2. Other receivables

                                                                                                                                 In RMB

                      Item                                   Closing balance                                Opening balance

Other receivables                                                          2,365,126,667.11                            1,973,381,342.74

Total                                                                      2,365,126,667.11                            1,973,381,342.74


(1) Other receivables

1) Other receivables are disclosed by nature

                                                                                                                                 In RMB

                 By nature                           Closing balance of book value                  Opening balance of book value

Deposit                                                                             70,699.54                                  70,699.54

Staff borrowing and petty cash                                                       3,671.12                                  15,881.12

Debt by Luo Huichi                                                           12,992,291.48                                12,992,291.48

Others                                                                             970,543.47                                 983,435.52

Accounts between related parties within
                                                                           2,364,992,462.81                            1,973,222,410.41
the scope of consolidation

Total                                                                      2,379,029,668.42                            1,987,284,718.07


2) Method of bad debt provision

                                                                                                                                 In RMB

                                  First stage               Second stage                    Third stage

                               Expected credit       Expected credit loss for the Expected credit loss for the
   Bad debt provision                                                                                                    Total
                             losses in the next 12    entire duration (no credit       entire duration (credit
                                   months                   impairment)               impairment has occurred)

Balance on January 01,
                                         2,403.91                                                 13,900,971.42           13,903,375.33
2020

Balance on January 01,
2020 in the current                 ——                        ——                            ——                     ——
period

Transferred back in the
                                            374.02                                                                               374.02
current period

Balance on June 30, 2020                 2,029.89                                                 13,900,971.42           13,903,001.31

Changes in book balances with significant changes in the current period


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□ Applicable √ Inapplicable
Account age
                                                                                                                               In RMB

                                 Age                                                           Closing balance

Within 1 year (inclusive)                                                                                            2,365,054,326.34

1-2 years                                                                                                                     3,671.12

2-3 years                                                                                                                   42,877.00

Over 3 years                                                                                                            13,928,793.96

   3-4 years                                                                                                               865,802.94

   4-5 years                                                                                                            12,992,291.48

   Over 5 years                                                                                                             70,699.54

Total                                                                                                                2,379,029,668.42


3) Bad debt provision made, returned or recovered in the period

Bad debt provision made in the period:
                                                                                                                               In RMB

                                                                  Change in the period
        Type        Opening balance                       Written-back or                                            Closing balance
                                            Provision                               Canceled           Others
                                                             recovered

Other receivables
and bad debt            13,903,375.33                                374.02                                             13,903,001.31
provision

Total                   13,903,375.33                                374.02                                             13,903,001.31


4) Balance of top 5 other receivables at the end of the period

                                                                                                                               In RMB

                                                                                                                  Balance of bad debt
         Entity                 By nature       Closing balance             Age                Percentage (%)     provision at the end
                                                                                                                     of the period

Fangda Property         Associate accounts       1,258,465,573.45 Less than 1 year                       52.90%

Fangda Jianke           Associate accounts       1,001,298,680.64 Less than 1 year                       42.09%

Fangda New Energy       Associate accounts          68,729,377.09 Less than 1 year                        2.89%

Shihui International    Associate accounts          30,459,793.09 Less than 1 year                        1.28%

Luo Huichi              Debt by SOZN                12,992,291.48 4-5 years                               0.55%         12,992,291.48

Total                              --            2,371,945,715.75             --                         99.70%         12,992,291.48




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3. Long-term share equity investment

                                                                                                                                   In RMB

                                          Closing balance                                          Opening balance
         Item        Remaining book         Impairment                          Remaining book       Impairment
                                                                Book value                                                 Book value
                          value              provision                               value             provision

Investment in
                     1,065,202,785.05                        1,065,202,785.05    963,508,253.00                           963,508,253.00
subsidiaries

Total                1,065,202,785.05                        1,065,202,785.05    963,508,253.00                           963,508,253.00


(1) Investment in subsidiaries

                                                                                                                                   In RMB

                                                               Change (+,-)                                                 Balance of
                                                                                                                            impairment
                    Opening book                                                                        Closing book
 Invested entity                        Increased        Decreased    Impairment                                          provision at the
                       value                                                              Others           value
                                       investment        investment    provision                                            end of the
                                                                                                                              period

                    491,950,000.0
Fangda Jianke                                                                                          491,950,000.00
                                  0

Fangda New
                    74,496,600.00                                                                       74,496,600.00
Material

                    200,000,000.0
Fangda Property                                                                                        200,000,000.00
                                  0

Shihui
                        61,653.00                                                                           61,653.00
International

Fangda New
                    99,000,000.00                                                                       99,000,000.00
Energy

Hongjun
Investment          98,000,000.00                                                                       98,000,000.00
Company

Fangda
                                      82,863,290.70                                    18,831,241.35 101,694,532.05
Zhichuang

                    963,508,253.0                                                                      1,065,202,785.
Total                                 82,863,290.70                                    18,831,241.35
                                  0                                                                                  05


4. Operational revenue and costs

                                                                                                                                   In RMB

             Item                     Amount occurred in the current period                   Occurred in previous period


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                                       Income                    Cost                      Income                    Cost

Other businesses                         12,719,395.10               151,219.77              17,142,022.88             3,496,588.06

Total                                    12,719,395.10               151,219.77              17,142,022.88             3,496,588.06

Income information:
                                                                                                                                In RMB

  Contract classification              Others                    Total

   Including: Other
                                         12,719,395.10            12,719,395.10
businesses

Total                                    12,719,395.10            12,719,395.10

Information related to performance obligations:
Information related to performance obligations:


5. Investment income

                                                                                                                                In RMB

                      Item                        Amount occurred in the current period           Occurred in previous period

Investment gain of financial products                                        338,561.17                                1,155,183.42

Total                                                                        338,561.17                                1,155,183.42


XVIII. Supplementary Materials

1. Detailed accidental gain/loss

√ Applicable □ Inapplicable
                                                                                                                                In RMB

                      Item                                      Amount                                       Notes

Gain/loss of non-current assets                                                -1,981.72

Subsidies accounted into the current income
account (except the government subsidy
closely related to the enterprise’s business                              3,564,328.35
and based on unified national standard
quota)

Gain/loss from change of fair value of
transactional financial asset and liabilities,
and investment gains from disposal of
transactional and derivative financial assets
                                                                           1,926,439.93
and liabilities and sellable financial assets,
other than valid period value instruments
related to the Company’s common
businesses


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Gain/loss from commissioned loans                                           397,420.84

Other non-business income and expenditures
                                                                         -5,000,026.69
other than the above

Less: Influenced amount of income tax                                       339,144.08

Total                                                                       547,036.63                       --

Explanation statement should be made for accidental gain/loss items defined and accidental gain/loss items defined as regular
gain/loss items according to the Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
□ Applicable √ Inapplicable


2. Net income on asset ratio and earning per share


                                                                                                 Earning per share
        Profit of the report period   Weighted average net income/asset ratio Basic earnings per share      Diluted Earnings per
                                                                                      (yuan/share)           share (yuan/share)

Net profit attributable to common
                                                                        2.81%                        0.13                       0.13
shareholders of the Company

Net profit attributable to the
common owners of the PLC after
                                                                        2.80%                        0.13                       0.13
deducting of non-recurring
gains/losses


3. Differences in accounting data under domestic and foreign accounting standards

(1) Differences in net profits and assets in financial statements disclosed according to the international and
Chinese account standards

□ Applicable √ Inapplicable


(2) Differences in net profits and assets in financial statements disclosed according to the international and
Chinese account standards

□ Applicable √ Inapplicable




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                              Chapter XII Documents for Reference

1. The Interim Report 2020 and the Summary with signature of the legal representative (Chinese and English);
2. Financial statements stamped and signed by the legal representative, CFO and accounting manager;
3. Originals of all documents and manuscripts of Public Notices of the Company disclosed in public in the newspapers as designated
by China Securities Regulatory Commission.




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