方大B:2019年半年度报告(英文版)

                       Interim Report 2019 of China Fangda Group Co., Ltd.




China Fangda Group Co., Ltd.

     2019 Interim Report




         August 2019




                                                                        1
                                                Interim Report 2019 of China Fangda Group Co., Ltd.




Chapter 1 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.




                                                                                                 2
                                                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.




                                                                     Table of Contents



Chapter 1 Important Statement, Table of Contents and Definitions.........................................................................................................2
Chapter 2 About the Company and Financial Highlights ........................................................................................................................6
Chapter 3 Business Introduction ............................................................................................................................................................10
Chapter 4 Operation Discussion and Analysis .......................................................................................................................................15
Chapter 5 Significant Events .................................................................................................................................................................28
Chapter 6 Changes in Share Capital and Shareholders ..........................................................................................................................36
Chapter 7 Preferred Shares ....................................................................................................................................................................41
Chapter 8 Particulars about the Directors, Supervisors, and Senior Management .................................................................................42
Chapter 9 Information about the Company’s Securities .....................................................................................................................43
Chapter 10 Financial Statements ...........................................................................................................................................................44
Chapter 11 Documents for Reference ..................................................................................................................................................174




                                                                                                                                                                                               3
                                                                    Interim Report 2019 of China Fangda Group Co., Ltd.




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

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

                                     Refers
Zhongrong Litai                               Shenzhen Zhongrong Litai Investment Co., Ltd.
                                       to

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

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


                                                                                                                     4
                                                           Interim Report 2019 of China Fangda Group Co., Ltd.


                               to

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

                             Refers
Kexunda Co.                           Shenzhen Kexunda Software Co., Ltd.
                               to

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

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

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

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

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

                             Refers
Jianke Australia                      Fangda Australia Pty Ltd
                               to

                             Refers
Fangda Southeast Asia                 Fangda Southeast Asia Company Limited
                               to

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

                             Refers
Shihui International                  Shihui International Holding 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




                                                                                                            5
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.




           Chapter 2 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

Name                                         Zhou Zhigang                                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.

Tel.                                         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 2018 for details.


2. Information disclosure and inquiring

Changes to the information disclosure and inquiring place
□ Applicable √ Inapplicable
Please refer to the 2018 annual report for the newspapers and websites where the Company’s information is disclosed. The inquiry

                                                                                                                                     6
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


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)                                         1,425,890,946.99              1,442,050,896.53                         -1.12%

Net profit attributable to shareholders of
                                                           128,581,755.01               230,131,663.19                        -44.13%
the listed company (yuan)

Net profit attributable to the shareholders
of the listed company and after deducting                  113,377,064.06               209,705,118.34                        -45.94%
of non-recurring gain/loss (RMB)

Net cash flow generated by business
                                                         -372,725,003.11                 -31,426,267.64                   -1,086.03%
operation (RMB)

Basic earnings per share (yuan/share)                                  0.11                           0.19                    -42.11%

Diluted Earnings per share (yuan/share)                                0.11                           0.19                    -42.11%

Weighted average net income/asset ratio                            2.55%                             6.99%                     -4.44%

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

Total asset (RMB)                                      10,940,802,780.45             10,658,854,133.73                          2.65%

Net profit attributable to the shareholders
                                                        5,023,788,122.76              5,195,187,621.88                         -3.30%
of the listed company (RMB)

  Notes:
  1. The above-mentioned decrease in ―net profit attributable to shareholders of the listed company‖ was mainly due to the fact that
  the Fangda Town project which had a higher gross profit during the reporting period and contributed more to the profit in the
  previous year, was nearing the end of the planned sales area resulting in a decrease in operating income and profit. In addition, the
  operating income, net profit and gross profit margin of the curtain wall systems and materials industries and rail transit screen door
  equipment businesses have increased, as follows:
  1. The real estate industry realized operating income of RMB204,754,300 in the first quarter of 2019, a decrease of 57.03% over
  the same period of the previous year; net profit of RMB55,294,600 was reduced by RMB113,516,400 compared with the same
  period of the previous year with a decrease of 67.24%.
  2. In the first quarter of 2019, the curtain wall system and materials industry realized operating income of RMB1,005,451,500, an
  increase of 23.53% over the same period of the previous year; the net profit was RMB48,390,900, an increase of 33%; the gross
  margin was 14.55%, up 0.67 percentages from the same period of last year;
  3. In the first half of 2019, the rail transit screen door equipment business realized operating income of RMB197,936,300, an
  increase of 50.79% over the same period of the previous year; net profit of RMB35,630,100, an increase of 68.76% over the same
  period of the previous year; gross profit margin of 28.00%, an increase of 4.67 percentage points.


  2. The decrease in the above-mentioned ―net cash flow from operating activities‖ was mainly due to the decrease in the revenue of
  the Fangda town project due to the decrease in operating income during the reporting period and the annual corporate income tax
  settlement and payment of taxes. The curtain wall system and materials industry and the rail transit screen door equipment


                                                                                                                                         7
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


  industry have basically remained the same or improved compared with the same period of the previous year, as follows:
  1. The net cash flow generated by the real estate industry in the first half of 2019 was RMB-181,979,600, compared with
RMB182,350,800 in the same period of the previous year, a decrease of RMB364,330,400 over the same period of the previous year.
  2. The net cash flow generated by the operating activities of the curtain wall system and materials industry in the first half of 2019
was RMB -157,339,500, compared with RMB-156,697,800 in the same period of last year, which was basically the same as that of
the same period of last year;
  3. The net cash flow generated by the operating activities of the rail transit screen door equipment industry in the first half of 2019
  was RMB-33,676,200, compared with RMB-47,830,600 in the same period of last year, which was improved compared with the
  same period of the previous year.


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.


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
                                                                                         -27,108.78
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                      3,504,406.39
and based on unified national standard quota)

Capital using expense charged to non-financial enterprises and
                                                                                        355,987.05
accounted into the current income account

Gain from entrusted investment or assets management                                   4,003,332.19

Gain/loss from change of fair value of transactional financial
asset and liabilities, and investment gains from disposal of                            882,741.74
transactional and derivative financial assets and liabilities and



                                                                                                                                        8
                                                                               Interim Report 2019 of China Fangda Group Co., Ltd.


sellable financial assets, other than valid period value instruments
related to the Company’s common businesses

Write-back of impairment provision of receivables and contract
                                                                                       16,097.16
assets for which impairment test is performed individually

Gain/loss from commissioned loans                                                      21,351.12

Other non-business income and expenditures other than the above                     4,495,326.37

Less: Influenced amount of income tax                                              -1,952,557.71

     Influenced amount of minority shareholders’ equity
                                                                                            0.00
(after-tax)

Total                                                                             15,204,690.95                   --

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.




                                                                                                                                 9
                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.




                                   Chapter 3 Business Introduction

1. Major businesses of the Company during the report period

Whether the Company needs to comply with disclosure requirements of special industries
Yes
Decoration

      The Company is headquartered in Nanshan District, Shenzhen. The stock was listed on the Shenzhen Stock Exchange on
November 29, 1995. Currently, five major business subsidiaries of the Company are national high-tech enterprises with modern
production bases in Shenzhen, Shanghai, Chengdu, Nanchang, Dongguan and Foshan. The Company was engaged in the following
businesses in the report period.
      1. Curtain wall system and material industry
      (1) Main products and purpose
      The Company’s main products include energy-saving curtain walls, building integrated photo-voltaics (BIPV), LED
color-display curtain walls and aluminum plate materials. Construction curtain walls are mainly used on high-level buildings,
large-area public venues such as airports, stations, cultural centers and exhibition centers, daylighting roof, shaped construction
(ball-shaped and clock-shaped buildings) with external retaining and decoration functions.
      (2) Main business modes, specific risks and changes;
      The 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 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. The Company’s curtain wall products are engineered by itself. The operation mode
remained unchanged in the report period.
      (3) Main business drive
      See III. Core Competitiveness Analysis.
      (4) Development stage of the industry, circle and industry position
      In the first half of the year, China's supply-side structural reforms continued to deepen, and the national regional coordinated
development strategy was further promoted. New urbanization, coordinated development of Beijing-Tianjin-Hebei, ―Belt and Road‖
construction, and Guangdong, Hong Kong, Macao and Dawan District development projects provided valuable opportunities for the
development of the curtain wall systems and materials business. Over recent years, a series of industry policies will be issued to push
forward the industry, providing a gold opportunity for the development of energy-saving curtain wall and material business. The
economic development of the first and second tier cities is relatively good, and there is a continuous demand for building curtain
walls. Therefore, the market capacity is relatively large and it is also the main area of the curtain wall market competition. There is no
obvious periodicity in the curtain wall industry.
      The Company is a pioneer and first listed company in this industry. 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 440 patents,
including 37 intention patents and 8 software copyrights. The Company also took part in the preparation of more than 10 national or
industry standards including the Public Construction Energy Saving Design Standard, making 9 records among Chinese enterprises.

                                                                                                                                       10
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


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.

      2. Rail transport equipment business

      The Company’s main products in this sector are rail transport screen door systems, which are a necessary part of modern
subway system. It is installed at the edge of the subway platform and separates trains from the platform. The Company seeks to win
orders through tenders and purchase raw materials and arrange production based on orders. The Company has built a complete
industry chain that integrates designing, production, engineering, after-sales services and technical services. The operation mode
remained unchanged in the report period. The Company has developed rail transport screen door systems with independent
intellectual property rights. The Company also prepared the first Rail Transport Station Screen Door Standard. At present, the
Company's subway screen doors have covered more than 60% of metropolitan-operated cities in China. More than 80 metro and
cloud rails of over 41 cities around the world have adopted the Fangda screen door systems, making the Company the world's largest
supplier of screen doors.

      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 three
photovoltaic power plants that have been connected to the grid have been operating smoothly and the power generation sales revenue
and operating profit have all reached the Company's expectations. Among them, the 20MW distributed photovoltaic power
generation project of Chayu Village, Xuanfeng Town, Luxi County, Jiangxi Province and the distributed photovoltaic power
generation project of, Songshan Lake in Dongguan have been included in the Renewable Issue issued by the Ministry of Finance the
National Development and Reform Commission and the National Energy Administration. The list of energy and electricity price
additional funds subsidies can be subsidized by electricity prices.

      4. Real estate
      The Company has completed one of the projects: Fangda Town; project under development: Nanchang Honggutan
Fenghuangzhou Fangda Center ", theProject; there are two projects in construction: Fangda Bangshen Project in Baoan District,
Shenzhen and Urban Renewal Project along the Dagang 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”.




II. Major assets change

1. Major assets change


                Main assets                                                       Major change


Equity assets                               None

Fixed assets                                None

Intangible assets                           None

                                            Construction in progress increased by 56.16% compared with the beginning of the year,
Construction in process
                                            mainly due to the increase in investment in construction of Chengdu Xinjin Base and



                                                                                                                                    11
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                                           Shanghai East China Base.

Investment real estate                     None


2. Major foreign assets

□ Applicable √ Inapplicable


3 Core Competitiveness Analysis

Whether the Company needs to comply with disclosure requirements of special industries
Yes
Decoration
      (1) Curtain wall system and material
      1. Expertise and brand competitiveness
      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 440 patents (including 37 invention patents) and 8 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. 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
      After years of accumulation and continuous investment in hardware facilities, 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.
      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 investment 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

                                                                                                                                  12
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customers and more orders. The overseas market orders are growing steadily.
      (2) Rail transport equipment business
      1. National development strategy
      With the implementation of major national strategies such as the Guangdong, Hong Kong, and Macao Bay District, Xiong'an
New District, and the ―Belt and Road‖ Initiative, the region has radiated into Southeast Asia, South Asia, Central Asia, and West Asia,
and has extended to Eastern Europe and North Africa with strong demand for infrastructure construction and interconnection. As the
world's largest supplier of rail transit shielding door systems, the Company will also make full use of its advantages in technology,
brand, and service to further consolidate and increase its domestic market share, and actively participate in rail transit construction in
Guangdong, Hong Kong, Macau BayDistrict and Xiong'an New District. The Company will vigorously expand overseas markets,
especially the ―Belt and Road‖ Initiative, maintain the continuity and stability of overseas orders, balance the development of
domestic and foreign markets, and continue to ―lead‖ 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 approved in April 2006 and 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 The Company participated in the preparation of the national standard
―Evaluation Method for Urban Rail Transit Energy Consumption and Emission Indicators‖ (GB/T 37420-2019) this year, which was
issued by the State Administration of Markets and the National Standardization Administration of China, and will be published in
2019 and formally implemented on December 1, 2019, fully embodying the company's leading edge and leading position in the field
of rail transit screen doors. The Company has 231 metro screen door patents, including 48 invention patents. The Company also has
eight computer software copyrights.
      3. Brand competitiveness
      Up to now, the Company's screen door system products have been applied in rail transit in 41 cities around the world, including
Hong Kong, Singapore, Kuala Lumpur, Malaysia, Noida, Thailand, Bangkok, Thailand, etc., with more than 10 million people using
large screen door systems every day. 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.
      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 60% 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



                                                                                                                                        13
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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. Through the development and operation of Shenzhen Fangda Town Project, the
Company has accumulated valuable experience in the operation of urban renewal projects, and has formed a complete operation
mode from the renewal of project plan approval, special planning approval, planning and construction, which is conducive to
continuous promotion. Development and operation of urban renewal projects such as Shenzhen Fangda Bangshen Project and
Shenzhen Henggang Dakang River area.
      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.




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                     Chapter 4 Operation Discussion and Analysis

1. Summary

     In the first half of 2019, the international environment was complex and changeable. The impact of Sino-US trade frictions
intensified and continued. The domestic economy continued to decline. The Company overcame many unfavorable factors and
completed the targets set at the beginning of the year. During the reporting period, the Company achieved operating income of
RMB1,425,890,900, a year-on-year decrease of 1.12%, and the net profit attributable to owners of the parent company was
RMB128,581,800, a year-on-year decrease of 44.13%. The decrease in operating income and net profit of the Company was mainly
due to the fact that the sales area of Fangda Town project with higher gross profit and greater contribution to profit in the same period
of last year was close completion. The project realized operating income of RMB204,754,300 in the first half of 2019, compared with
the same period of last year. The decrease was RMB271,728,600, a decrease of 57.03%, and the net profit was RMB55,294,600, a
decrease of RMB113,516,400 from the same period of the previous year, a decrease of 67.24%. In addition, in the first half of the
year, the Company's two major industrial curtain wall systems and materials industry and rail transit screen door equipment industry
developed well. The curtain wall system and materials industry operating income and net profit increased by 23.53% and 33%
respectively. The operating income and net profit of the door equipment industry increased by 50.79% and 68.76% respectively. As
of the end of the reporting period, the company's order reserve was RMB4,992,541,500 (excluding real estate sales), an increase of
7.71% compared with the beginning of the year, which was 3.5 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.
      1. High-end curtain wall system and material business
     The Company has always practiced the business philosophy of ―technology-based, innovation as the source‖, 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. The quality and quantity of the newly signed orders in the first half of the year have remained at a high level. In
the first half of the year, the Company secured the 188S-C-4 and 188S-D-1 plots of the WS5 unit in the south section of the Huangpu
River in Xuhui District, Shanghai, and the 31-01(D) plot office building in Xujingzhong, Shanghai Xihongqiao Business District,
Chengdu Tianfu Wanke Yuncheng, Chengdu Tianfu International Conference Center, Chengdu Longhu Renmin North Road 6-7
Group Central Commercial Street, Chongqing Longhu Shapingba Hub Project, Nanjing Vanke Shangduhui Project, Shenzhen
Shangzhi Science and Technology Park, Shenzhen Qianhai East Asia Kerry, Shenzhen Jinxiu Science Park Phase III, Shenzhen
Vanke Antoshan Project, Zhuhai Renhe Hengqin International Chinese Medicine Innovation Center, Marriott Docklands Marriott
Melbourne, Australia, Victoria Square, Melbourne, Australia, 89 Victoria Street, Brisbane, Saudi Arabia A large number of high-end
curtain wall systems and materials projects, totaled RMB1.178 bilion. 2. In the first half of 2019, the curtain wall system and
materials industry realized operating income of RMB1,005,451,500, an increase of 23.53% over the same period of the previous year;
the net profit was RMB48,390,900, an increase of 33%, the gross margin was 14.55%, up 0.67 percentages from the same period of
last year. As of the end of the reporting period, the Company's curtain wall system and materials industry orders reserve was
RMB3,134,694,300 which was 3.12 times of the operating income of the curtain wall system and materials industry in the first half
of 2019.
     In order to meet the growing demand for orders, the Company has established new production bases in Chengdu Xinjin and
Shanghai Songjiang. In June this year the Fangda Western Headquarters Base of Chengdu Xinjin has been basically completed. The
base covers an area of 45,000 square meters and has a total construction area of about 21,000 square meters. The company's East
China production base in Songjiang, Shanghai, has started in the first half of the year and is scheduled to be completed by the end of
this year. The base covers an area of 23,800 square meters and has a total construction area of 43,000 square meters. After the
completion of the two bases, the national industrial layout of the upgrade company will be improved and the production capacity of


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the Company's energy-saving and environmental protection curtain wall will be enhanced to provide guarantee for the Company's
sustained and rapid development. 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 curtain wall project of the four projects of Zhuhai R&F Yingkai Plaza, Shenzhen Jinlitong
Financial Center, Shenzhen Vanke Binhai Land Building and Haikou Henghaihua Island under construction completed the above
projects with high quality product quality and service capacity.          The high-tech and high-difficult curtain wall design and
construction tasks have won honors such as ―Excellent Suppliers‖ from R&F Group, Qianhai Life Insurance, Vanke and Evergrande,
reflecting the recognition of the Company's comprehensive strength and brand of the Company's curtain wall business.
      2. Rail transport screen door business
      As the national ―Belt and Road‖ initiative continues to deepen and the development strategy of Guangdong, Hong Kong and
Macao Dawan District continues to advance in depth, in the first half of 2019, the Company's rail transit screen door equipment
industry has expanded rapidly and has won the Mumbai Metro Line in India, Nanjing Metro Line 7, Zhengzhou Line 4, Ningbo
Metro Line 1, Guiyang Metro Line 2, Phase II, Jinan Rail Transit R2 Line 1, Wuhan Metro Line 5, Xi'an Metro Line 5 orders for
screen door system projects, and also obtained orders for professional technical maintenance services for shielded doors of Wuhan
Railway Bureau and Shenzhen Metro Line 9, and Shenzhen Metro 1, 2, 3, 5, 7, 9, and 11. Line shield door installation project orders,
the total amount of new signed singles was RMB618,636,600, an increase of 95%. Among them, the Mumbai Metro Line 3 project in
India is the third project of the company in the Indian market after the Noida subway in India and the Ahmedabad subway project in
India. The company will continue to firmly grasp the rapid development opportunities of the Indian subway construction. Take the
―One Belt, One Road‖ express train to speed up the overseas market layout and further expand the Company's business landscape. In
the first half of the year, the Company's rail transit screen door equipment industry realized operating income of RMB197,936,300, a
year-on-year increase of 50.79%, net profit of RMB35,630,100, a year-on-year increase of 68.76%, and a gross profit margin of
28.00%, an increase of 4.67 percentage points. As of the end of the reporting period, the Company's rail transit screen equipment
industry orders reserve reached RMB1,857,847,200, an increase of 27.38% compared with the beginning of the year, which is 9.38
times of the company's rail transit screen equipment industry operating income in the first half of the year. The Company's rail transit
screen door equipment industry has reached a new level, entering a new era of rapid development and continuing to lead the industry.
      During the reporting period, the Company's construction of the screen door system of the Wuhan Metro Line 2 South Extension
Line, Zhengzhou Metro Line 5, Lanzhou Metro Line 1 Phase 1, and Nanchang Metro Line 2 after the passage section were opened.
At present, Fangda's screen door system has been applied in rail transit in 41 cities around the world. The domestic coverage of the
screen door system is over 60%. There are more than 10 million people using the large screen door system every day. The market
share has ranked first in the world for nearly five years, and the Company is the world's largest supplier of rail transit screen doors.
      On May 10, the Company participated in the preparation of the national standard ―Evaluation Method for Urban Rail Transit
Energy Consumption and Emission Indicators‖ (GB/T 37420-2019) 5 year, which was issued by the State Administration of Markets
and the National Standardization Administration of China, and will be published in 2019 and formally implemented on December 1,
2019. The Company's participation in the preparation of the first domestic screen door industry standard "Urban Rail Transit Platform
Screen Door", andin the standard compilation in the domestic rail transit field reflect the Company's technology in the urban rail
transit field.
      3. New energy industry
      In the first half of the year, there were more rains. The Company strengthened the operation and maintenance of solar
photovoltaic power station equipment. The three solar photovoltaic power plants that have been connected to the grid have
maintained efficient and safe operation.
      4. Real estate
      (1) Shenzhen Fangda Town Project: In the first half of 2019, the Fangda Town project achieved a sales area of 2,853.75 square



                                                                                                                                           16
                                                                                     Interim Report 2019 of China Fangda Group Co., Ltd.


meters and an accumulated sales area of 85,264.25 square meters. As of the end of the first half of 2019, the area for sale was 7,822
square meters. The business investment signing rate was 94%, the cumulative rental area of 1# building was 16,854.13 square meters,
and the occupancy rate was 23.24%.
      (2) Nanchang Fenghuangzhou Project (Fangda Center Project): The project is located in Fenghuangzhou Area, Honggutan New
District, Nanchang City. Construction started in May 2018. The project covers an area of about 17,000 square meters and has a total
construction area of about 93,000 square meters. With a total construction area of 66,000 square meters, Jirong is a commercial
complex covering commercial, apartment and office buildings. The self-use and sales area of the whole project is half of each. The
project is scheduled to start pre-sale in the second half of 2019 and be completed and accepted in the first half of 2020. At present,
the project construction is progressing in accordance with the expected engineering nodes. In the future, the project will contribute
profits and cash flow to the Company.
      (3) Shenzhen Fangda Bangshen Industrial Park Project: 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 has begun to declare the project. As of the end of
the first half of 2019, the project is still in the stage of approval.
      (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 80,000 square meters. The update direction is
mainly residential function, and finally subject to government approval. The project work is currently being actively promoted.
      5. Awards
      During the reporting period, the Company won the title of ―Guangdong Province May 1st Labor Award‖, ―Shenzhen Quality
Strong City Key Enterprise‖, ―2018 Shenzhen Quality Credit Demonstration Unit‖, and was awarded the ―Innovation ChinaTop 100
Listed Company‖ award. Ranked 12th in the growth list of A-share listed companies in the past five years.
      Fangda Jianke Co., a wholly-owned subsidiary, was awarded ―2019 Shenzhen University Building Doors and Windows Curtain
Wall Industry Academic Exchange Advanced Unit‖. General Manager Wei Yuexing won the ―Innovative Talents‖ award in Shenzhen
Decoration Industry and Zhang Jianhui, Regional Manager, won the ―Top Ten Outstanding Project Managers‖ award. Senior designer
Hu Guangzhou won the "Top Ten Young Designers" award and the curtain wall maker Xu Xiuhui won the "Top Ten Star Craftsmen"
award. The four curtain wall projects including Fangda Town (Phase I), Shenye Shangcheng (Southern District) Tower 2, China
Energy Storage Building and China Southern Power Grid Production and Research Comprehensive Base undertaken by the company
won the ―China Construction Engineering Decoration Award‖. Shenzhen Hanjing Finance curtain wall project was awarded ―My
Favorite Curtain Wall Project‖.
      Fangda Zhichuang Technology, a wholly-owned subsidiary, was awarded "Shenzhen Metro 2018 Excellent Equipment
Supplier", "Shenzhen Metro Phase III Excellent Equipment Supplier", and "Shenzhen Metro Line 7, 9 and 11 Performance
Evaluation Excellent Unit" "2018 Xi'an Metro Construction Labor Competition Advanced Unit", employees Ouyang Kehua, Zhu
Zhenfei, Kong Debing were awarded "Shenzhen Baiyou Craftsman" and Tang Long was awarded "2018 Xi'an Subway Construction
Labor Competition Advanced Individual".
      Fangda Jiangxi New Material received titles including 2018 Nanchang High-Tech Industry Park Leading Enterprise, and
Leading Company in Standardization.
      After 2018, the wholly-owned subsidiary Fangda Real Estate Co., Ltd. was once again awarded the "Shenzhen Real Estate
Development Industry Brand Value Enterprise" award by the Shenzhen Real Estate Association.


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 (% )          Cause of change


                                                                                                                                         17
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


Turnover                             1,425,890,946.99        1,442,050,896.53                    -1.12%

Operation cost                       1,066,065,970.56          935,486,175.73                    13.96%

Sales expense                          27,175,638.50            27,060,141.24                     0.43%

Administrative expense                 82,678,777.56            66,539,185.89                    24.26%

                                                                                                          Mainly due to the
                                                                                                          increase in borrowings
                                                                                                          during the period and the
Financial expenses                     49,481,340.36            33,772,321.68                    46.51% suspension of
                                                                                                          capitalization of interest
                                                                                                          expenses of Fangda
                                                                                                          Town project

                                                                                                          Mainly due to the
                                                                                                          decrease in profits which
Income tax expenses                    24,019,259.71            63,046,179.95                   -61.90%
                                                                                                          is due to the decrease in
                                                                                                          income tax

                                                                                                          Mainly due to increased
R&D investment                         69,859,537.37            42,082,922.04                    66.00% investment in research
                                                                                                          and development

                                                                                                          Mainly due to the
Cash flow generated by                                                                                    decrease in cash flow
                                      -372,725,003.11          -31,426,267.64                -1,086.03%
business operations, net                                                                                  from real estate business
                                                                                                          activities

                                                                                                          Mainly due to the fact
Cash flow generated by                                                                                    that the current wealth
                                     -579,720,478.07           -43,736,732.77                -1,225.48%
investment activities, net                                                                                management investment
                                                                                                          has not been repaid

                                                                                                          Mainly due to the
                                                                                                          increase in bank loans
Net cash flow generated
                                      376,629,126.62            94,383,606.69                   299.04% and the payment of cash
by financing activities
                                                                                                          dividends in the current
                                                                                                          period.

Net increase in cash and
                                     -576,045,363.83            20,226,410.15                -2,947.99%
cash equivalents

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.
3. Business composition
                                                                                                                               In RMB

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


                                                                                                                                       18
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


                                                                               operating revenue operating costs         margin

Industry

Metal production 1,005,451,498.68        859,166,194.19               14.55%             23.53%              22.57%            0.67%

Real estate           204,754,339.12      57,493,641.50               71.92%            -57.03%              -54.67%          -1.46%

Railroad industry     197,936,254.53     142,515,728.84               28.00%             50.79%              41.61%            4.67%

Product

Curtain wall
system and          1,005,451,498.68     859,166,194.19               14.55%             23.53%              22.57%            0.67%
materials

Real estate sales     204,754,339.12      57,493,641.50               71.92%            -57.03%              -54.67%          -1.46%

Metro screen
                      197,936,254.53     142,515,728.84               28.00%             50.79%              41.61%            4.67%
door

District

In China            1,376,533,552.06 1,030,698,498.88                 25.12%              -1.86%             13.64%          -10.21%


3. Non-core business analysis

√ Applicable □ Inapplicable
                                                                                                                              In RMB

                                Amount            Profit percentage                  Reason                   Whether continuous

                                                                        Mainly from bank financial
Investment income                 4,056,397.16                2.66%                                    No
                                                                        products

Gain/loss caused by
                                                                        Changes in the fair value of
changes in fair                     121,506.67                0.08%                                    No
                                                                        investment fund products
value

                                                                        Mainly bad debt provision
Assets impairment                 -4,369,660.38               -2.86% corresponding to accounts         Yes
                                                                        receivable

                                                                        Mainly due to the overdue
                                                                        interest income of the
Non-operating
                                  4,873,892.15                3.19% receivables of Chongqing           No
revenue
                                                                        Telecom project of
                                                                        RMB4,372,800.

Non-business
                                    378,565.80                0.25%                                    No
expenses




                                                                                                                                   19
                                                                                         Interim Report 2019 of China Fangda Group Co., Ltd.


4. 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

                       1,072,726,726.                   1,199,195,175.
Monetary capital                               9.80%                           15.19%        -5.39%
                                  45                               72

Account                2,118,904,495.                   2,077,617,891.
                                              19.37%                           26.32%        -6.95%
receivable                        79                               78

                       750,395,540.0
Inventory                                      6.86% 726,389,203.30             9.20%        -2.34%
                                    6

                                                                                                      Mainly due to the Fangda Town Project
                                                                                                      1# building as an investment real
Investment real        5,285,303,323.                   2,332,213,399.
                                              48.31%                           29.55%        18.76% estate, since the fourth quarter of 2018,
estate                            58                               66
                                                                                                      the subsequent measurement based on
                                                                                                      fair value to generate value-added

Long-term share
                       69,779,924.33           0.64% 69,871,054.85              0.89%        -0.25%
equity investment

                       431,948,450.6
Fixed assets                                   3.95% 474,159,833.94             6.01%        -2.06%
                                    6

Construction in
                       90,993,650.25           0.83%     2,820,259.75           0.04%         0.79%
process

                       900,000,000.0
Short-term loans                               8.23% 524,000,000.00             6.64%         1.59%
                                    0

                                                                                                      Repayment of borrowings in the
                       593,978,153.3                    1,293,978,153.                                current period and reclassification of
Long-term loans                                5.43%                           16.39% -10.96%
                                    9                              39                                 payments due within one year to
                                                                                                      current liabilities

Other current          114,294,388.8                                                                  Mainly due to decrease in bank
                                               1.04% 270,720,575.33             3.43%        -2.39%
assets                              1                                                                 financial products

Non-current                                                                                           Increase the reclassification of
                       800,000,000.0
liabilities due in 1                           7.31% 200,000,000.00             2.53%         4.78% long-term borrowings due within one
                                    0
year                                                                                                  year


2. Assets and liabilities measured at fair value

√ Applicable □ Inapplicable
                                                                                                                                         In RMB

                                                                                                                                               20
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


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

Financial assets

1.
Transactional
financial assets
(excluding                             121,506.67                                        400,000,000.00 200,000,000.00 200,121,506.67
derivative
financial
assets)

2. Derivative
                                                                                                                               17,375.00
financial assets

4. Investment
in other equity     21,674,008.23                    -6,888,567.44                                                         21,674,008.23
tools

Subtotal            21,674,008.23      121,506.67    -6,888,567.44                       400,000,000.00 200,000,000.00 221,812,889.90

Investment real 5,230,896,067.                                                                                             5,260,188,084.
                                                     11,675,404.61                        29,292,017.43
estate                         50                                                                                                      93

                   5,252,570,075.                                                                                          5,482,000,974.
Total                                  121,506.67     4,786,837.17                       429,292,017.43 200,000,000.00
                               73                                                                                                      83

Financial
                     1,625,725.00                                                                                                   0.00
liabilities

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                                         692,581,199.60        Deposit and time deposit
 Fixed assets                                              50,528,321.98             Credit guarantee
 Investment real estate                                   309,189,866.37             Credit guarantee
 100% stake in Fangda Property
 Development held by the Company                          200,000,000.00                Loan by pledge
                   Total                                1,252,299,387.95




                                                                                                                                        21
                                                                                              Interim Report 2019 of China Fangda Group Co., Ltd.


VI. Investment

1. General situation

□ Applicable √ Inapplicable


2. Major equity investment in the report period

√ Applicable □ Inapplicable
                                                                                                                                                        In RMB

                                                                                              Progre
                                                                                                                     Current
Investe              Method                Shareh                          Term               ss as of                          Whether                Disclos
            Main                Invest                                                                   Estima investm                     Disclosu
     d                 of                  olding Capital                      of   Type of     the                             litigatio                ure
           busines              ment                           Partner                                     te          ent                  re date
compan               invest                percent source                  invest product balanc                                  n is                 source
              s                amount                                                                    return       profit                (if any)
     y                ment                  age                            ment               e sheet                           involved               (if any)
                                                                                                                     and loss
                                                                                               date

                                                               Shenzh
                                                               en
                                                               Yikang
                                                               Real
                                                               Estate
                                                                                              55%
                                                               Co.,
                                                                                              equity
                                                               Ltd.,
                                                                                              has
                                                               Shenzh
                                                                                              been
Shenzh                                                         en
                                                                          Zhongr              transfe
en                                                             Qianha
                                                                          ong                 rred
Zhongr Real                                                    i                    Real
                                112,61                Self-o              Litai's             and
ong        estate    Acquisi               100.00              Zhongz               estate                           -403,89
                               3,316.6                wned                actual              control           --              No          None       None
Litai      develop tion                           %            heng                 develo                               4.30
                                       8              fund                operati             has
Investm ment                                                   Dingfe               pment
                                                                          ng                  been
ent Co.,                                                       ng No.
                                                                          period              transfe
Ltd.                                                           6
                                                                                              rred to
                                                               Invest
                                                                                              the
                                                               ment
                                                                                              Compa
                                                               Enterpr
                                                                                              ny
                                                               ise
                                                               (Limite
                                                               d
                                                               Partner
                                                               ship)

                                112,61
                                                                                                                     -403,89
Total         --       --      3,316.6       --          --          --        --      --          --           --                   --        --         --
                                                                                                                         4.30
                                       8



                                                                                                                                                               22
                                                                                     Interim Report 2019 of China Fangda Group Co., Ltd.


3. Major non-equity investment in the report period

□ Applicable √ Inapplicable


4. Financial assets investment

(1) Securities investment

√ Applicable □ Inapplicable

                                                                         Accumu
                                                                          lative
                                                              Gain/los changes
                                                              s caused in fair Amount Amount
                                 Initial Account Opening                                                          Closing
Securiti            Abbrevi                                      by       value    purchas sold in Gain/los                 Account Capital
            Code                investm      ing     book                                                          book
   es                   ation                                 changes accounti ed in the      the       s                   ing item source
                                ent cost method      value                                                         value
                                                               in fair   ng into   period    period
                                                               value       the
                                                                         income
                                                                         account

                                           Measure                                                                          Transact
                    Jinxin
                                200,000 ment at                                    200,000 200,000 761,235                  ional      Self-ow
Fund       004400 Minxing                              0.00                                                          0.00
                                 ,000.00 fair                                      ,000.00 ,000.00          .07             financia ned fund
                    Bond A
                                           value                                                                            l assets

                    Dongfan
                    g Huixin
                    Flexible
                    Configu
                    ration                 Measure                                                                          Transact
                    Compou 200,000 ment at                    121,506              200,000            121,506 200,121 ional            Self-ow
Fund       002163                                      0.00
                    nd           ,000.00 fair                      .67             ,000.00                  .67 ,506.67 financia ned fund
                    Securitie              value                                                                            l assets
                    s
                    Investm
                    ent Fund
                    Class C

                                400,000                       121,506              400,000 200,000 882,741 200,121
Total                                           --     0.00                 0.00                                               --         --
                                 ,000.00                           .67             ,000.00 ,000.00          .74 ,506.67

Disclosure date of approval
by the Board of Directors       September 11, 2018
of securities investment

Disclosure date of approval
                                None
by the Board of Directors



                                                                                                                                               23
                                                                                               Interim Report 2019 of China Fangda Group Co., Ltd.


of securities investment


(2) Derivative investment

√ Applicable □ Inapplicable
                                                                                                                                                  In RMB10,000

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

Shangha
i                                  Shanghai                          January
                                               2,535.7 July 13,                 2,535.7 11,019.7 8,458.2                           5,097.3
Futures No             No          aluminu                           31,                                                                         1.01%       34.16
                                                         6 2018                           6             7           1                      2
Exchan                             m                                 2020
ge

                                               2,535.7                          2,535.7 11,019.7 8,458.2                           5,097.3
Total                                                         --           --                                                                    1.01%       34.16
                                                         6                                6             7           1                      2

Capital source                                Self-owned fund

Lawsuit involved                              None

Disclosure date of derivative
investment approval by the Board of October 31, 2017
Directors

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

Risk analysis and control measures
                                              To prevent the risk of fluctuation of raw material prices, the Company adopted the aluminum
for the derivative holding in the
                                              futures exchanged at the domestic futures exchange to provide hedging for aluminum as a
report period (including without
                                              raw material for the Company. The Company has set up and implemented the Provincial
limitation market, liquidity, credit,
                                              Regulations on China Fangda Group Domestic Futures Hedging to prevent risks.
operation and legal risks)

Changes in the market price or fair
                                              Fair value of derivatives are measured at open prices in the futures market
value of the derivative in the report



                                                                                                                                                                  24
                                                                                     Interim Report 2019 of China Fangda Group Co., Ltd.


period, the analysis of the
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. 559,417,204. 238,461,667. 197,936,254. 28,115,721
               Subsidiary           screen door                                                                              24,260,468.27
Zhichuang                                          00                         89            32             53          .39
                                    and service

Fangda                                             200,000,000. 6,456,192,05 3,237,187,29 185,080,344. 66,076,465
               Subsidiary           Real estate                                                                              53,874,527.52
Property                                           00                       6.32          9.99             80          .64

                                    Curtain wall
Fangda                                             500,000,000. 3,260,584,98 1,074,236,65 906,677,681. 48,690,014
               Subsidiary           system and                                                                               44,399,848.47
Jianke                                             00                       6.85          9.57             20          .92
                                    materials

Acquisition and disposal of subsidiaries in the report period
√ Applicable □ Inapplicable

                 Company                           Acquisition and disposal of subsidiaries in   Impacts on overall production, operation



                                                                                                                                            25
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


                                                           the report period                           and performance

Fangda Southeast Asia Company Limited        Newly set                                    None

Shenzhen Zhongrong Litai Investment Co.,
                                             Obtained from transfer                       None
Ltd.

Shenzhen Kexunda Software Co., Ltd.          Liquidation                                  None


VIII. Structural entities controlled by the Company

□ Applicable √ Inapplicable


IX. Forecast of operating performance between January and September in 2019

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

       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 addition, the market concentration
of first- and second-tier cities will increase, and regional competition will become more intense. The Company will continue to adopt
a prudent management policy, refined management, and technological innovations to reduce management costs and accelerate the
return of funds. Through new technologies and processes, we will improve product quality, lower costs and elevate earnings. While
consolidating the domestic market, the Company will step up the efforts in exploring overseas markets, thus elevating our
competitiveness in global markets and improving our resistance to risks.

       2. Management risks and measures
       With an increase in orders in recent years and operation of five industry bases, the Company has continued expanding rapidly
in terms of capitalization, business and teams. The organizational structure and management system have become more complicated,
leading to management risks in industry 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. We
will create a sound environment for innovation and development encourage product innovation technological innovation and
management innovation and further enhance the Company's business competitiveness.
       3. Production and operation risks and measures
       The trade fight between China and the U.S., 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, accelerate inventory
turnover, pay attention to technical R&D, reduce consumption of raw materials, introduce automatic and intelligent production
equipment, strengthen staff training to improve working efficiency.
       4. Solar PV power plant risks and measures
       As an important asset, photovoltaic power plants need to ensure the safe and stable operation of the power station. The
Company guarantees through the establishment of reasonable operation and maintenance division and scientific management system,


                                                                                                                                     26
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


such as production operation system, safety management system, emergency fire protection system, equipment operation rules, etc.,
timely grasp the operation status of the power station, and find existing or potential problems. Ensure normal power generation.
     5. Risks and countermeasures of real estate project policy regulation
     1. The Company is committed to the Guangdong-Hong KongMacao Bay District, of urban renewal projects in the core area of
Shenzhen. According to the market and policy, the Company will carefully select relevant projects to avoid related risks.




                                                                                                                                   27
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.




                                      Chapter 5 Significant Events

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

1. Annual shareholder meeting during the report period


                                      Participation of                       Date of
    Meeting              Type                                     Date                         Index for information disclosure
                                         investors                          disclosure

2018 Annual       Annual                                                                 Notice on Resolutions of the Annual
                                                           February 19,   February 20,
Shareholder       shareholders’                  21.52%                                 Shareholders’ Meeting (2018) (2019-19)
                                                           2019           2019
Meeting           meeting                                                                released on 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




                                                                                                                                   28
                                                                                 Interim Report 2019 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


IX. Punishment and rectification

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


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

□ Applicable √ Inapplicable


XI. 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


XII. 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.


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.




                                                                                                                                 29
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


3. Related transactions related to joint external investment

□ Applicable √ Inapplicable
The Company made no related transaction of joint external investment in the report period.


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.


XIII. 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.


XIV. 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 investment real estate is used as external leasing. The rental income in the report period is RMB32,407,941.33.
Projects that create gains accounting for over 10% of the Company’s total profit in the report period
□ Applicable √ Inapplicable
The Company leased no projects that create gains accounting for over 10% of the Company’s total profit in the report period.



                                                                                                                                   30
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


2. Significant guarantee

√ Applicable □ Inapplicable


(1) Guarantee

                                                                                                                           In RMB10,000

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

                                                 Actual date of
     Guarantee         Date of      Guarantee      occurring       Actual amount       Type of                       Complete Related
                                                                                                        Term
    provided to       disclosure     amount     (signing date of    of guarantee      guarantee                      d or not     party
                                                  agreements)

None

                                                 Guarantee provided to subsidiaries

                                                 Actual date of
     Guarantee         Date of      Guarantee      occurring       Actual amount       Type of                       Complete Related
                                                                                                        Term
    provided to       disclosure     amount     (signing date of    of guarantee      guarantee                      d or not     party
                                                  agreements)

                                                                                                    since engage
                     January 30,                                                                    of contract to
Fangda Jianke                           30,000 August 28, 2018          12,537.24 Joint liability                    No         Yes
                     2019                                                                           2 years upon
                                                                                                    due of debt

                                                                                                    since engage
                     January 30,                                                                    of contract to
Fangda Jianke                           40,000 April 1 2019             13,722.24 Joint liability                    No         Yes
                     2019                                                                           2 years upon
                                                                                                    due of debt

                                                                                                    since engage
                     January 30,                                                                    of contract to
Fangda Jianke                           40,000 March 26, 2019            9,392.86 Joint liability                    No         Yes
                     2019                                                                           2 years upon
                                                                                                    due of debt

                                                                                                    since engage
                     January 30,                                                                    of contract to
Fangda Jianke                           20,000 April 10, 2018           11,174.93 Joint liability                    No         Yes
                     2019                                                                           2 years upon
                                                                                                    due of debt

                                                                                                    since engage
                     January 30,                                                                    of contract to
Fangda Jianke                            9,000 July 13, 2018                6,288 Joint liability                    No         Yes
                     2019                                                                           2 years upon
                                                                                                    due of debt

                                                                                                    since engage
                     January 30,
Fangda Jianke                           10,000 June 11, 2018             1,165.19 Joint liability of contract to No             Yes
                     2019
                                                                                                    2 years upon


                                                                                                                                          31
                                                                             Interim Report 2019 of China Fangda Group Co., Ltd.


                                                                                                 due of debt

                                                                                                 since engage
                    January 30,                                                                  of contract to
Fangda Zhichuang                   21,600 August 06, 2018            18,429.4 Joint liability                     No   Yes
                    2019                                                                         2 years upon
                                                                                                 due of debt

                                                                                                 since engage
                    January 30,                                                                  of contract to
Fangda Zhichuang                   12,000 March 26, 2019               303.25 Joint liability                     No   Yes
                    2019                                                                         2 years upon
                                                                                                 due of debt

                                                                                                 since engage
                    January 30,                                                                  of contract to
Fangda Zhichuang                   15,000 May 27, 2019               4,398.15 Joint liability                     No   Yes
                    2019                                                                         2 years upon
                                                                                                 due of debt

                                                                                                 since engage
Fangda New          January 30,                                                                  of contract to
                                    8,000 April 24, 2019             7,715.84 Joint liability                     No   Yes
Material            2019                                                                         2 years upon
                                                                                                 due of debt

                                                                                                 since engage
Fangda New          January 30,                                                                  of contract to
                                    6,500 June 26, 2019                795.98 Joint liability                     No   Yes
Material            2019                                                                         2 years upon
                                                                                                 due of debt

                                                                                                 since engage
                    January 30,             February 03,                                         of contract to
Fangda Property                   130,000                           79,397.82 Joint liability                     No   Yes
                    2019                    2015                                                 2 years upon
                                                                                                 due of debt

                                                                                                 since engage
                    January 30,                                                                  of contract to
The Company                        60,000 March 26, 2019               20,000 Joint liability                     No   Yes
                    2019                                                                         2 years upon
                                                                                                 due of debt

                                                                                                 since engage
                    January 30,             September 29,                                        of contract to
The Company                        25,000                              20,000 Joint liability                     No   Yes
                    2019                    2018                                                 2 years upon
                                                                                                 due of debt

Total of guarantee to                                         Total of guarantee to
subsidiaries approved in the                        427,100 subsidiaries actually occurred                              66,608.98
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                     427,100                                                            205,320.89
                                                              subsidiaries as of end of report
report term (B3)
                                                              term (B4)

                                              Guarantee provided to subsidiaries


                                                                                                                               32
                                                                                     Interim Report 2019 of China Fangda Group Co., Ltd.


                                                  Actual date of
       Guarantee         Date of      Guarantee      occurring       Actual amount       Type of                  Complete Related
                                                                                                        Term
    provided to         disclosure     amount     (signing date of    of guarantee      guarantee                  d or not      party
                                                   agreements)

None

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

Total of guarantee approved in                                       Total of guarantee occurred in
                                                          427,100                                                              66,608.98
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                                     427,100 of the end of report term                                   205,320.89
(A3+B3+C3)                                                           (A4+B4+C4)

Percentage of the total guarantee occurred (A4+B4+C4) on net
                                                                                                                                 40.87%
asset of the Company

Including:

Guarantees provided to the shareholders, substantial
                                                                                                                                         0
controllers and the related parties (D)

Guarantee provided directly or indirectly to objects with over
                                                                                                                                         0
70% of liability on asset ratio (E)

Amount of guarantee over 50% of the net asset (F)                                                                                        0

Total of the above 3 (D+E+F)                                                                                                             0

Statement on the possible joint liabilities on the guarantees not
                                                                     None
due yet (if any)

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. Other significant contract

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


XV. Social responsibilities

1. Environmental protection

Whether the Company and its subsidiaries are key polluting companies disclosed by the environmental protection authority



                                                                                                                                         33
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


No
The Company and its subsidiaries have earnestly implemented the Environmental Protection Law of the People's Republic of China,
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 2019, the Company used funds for precision poverty alleviation projects of RMB122,000 as follows:
(1) Donated RMB100,000 to the Ganzhou Charity Federation of Jiangxi Province to fund the Ruijin City Charity Association to
purchase defibrillators at the Red Spot;
(2) donated RMB20,000 to two poverty-stricken villages in Luxi County, Pingxiang City, Jiangxi Province for the construction of
public facilities;
(3) Donated RMB2,000 to the Social Assistance Center of Luxiang Town, Jinshan District, Shanghai for charity assistance activities.


(2) Result of targeted poverty alleviation


                                 Specifications                                   Unit                   Qty/Description

1. General situation                                                              ——                         ——

   Including: 1. capital                                                     (in RMB10,000)                                      12.2

II. Investment                                                                    ——                         ——

   1. Industry development poverty relief                                         ——                         ——

   2. Employment transfer                                                         ——                         ——

   3. Relocation                                                                  ——                         ——

   4. Education                                                                   ——                         ——

   5. Health care support                                                         ——                         ——

Including:           5.1 Contribution to health care sources in poor areas   (in RMB10,000)                                       10

   6. Eco-protection support                                                      ——                         ——

   7. Last-line guarantee                                                         ——                         ——

   8. Social poverty relieving                                                    ——                         ——

               8.2 Targeted poverty alleviation investment amount            (in RMB10,000)                                         2

   9. Others                                                                      ——                         ——

Including:        9.1 Number of projects                                          Item                                              1

               9.2 Investment                                                (in RMB10,000)                                       0.2

III. Prizes                                                                       ——                         ——




                                                                                                                                    34
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


(3) Further property relief plans

The Company donated Amount RMB680,000 for targeted poverty in H1 2019:
(1) In order to help the Lianhua County of Pingxiang City Jiangxi Province to achieve poverty alleviation, the Company plans to
donate RMB500,000 to the Pingxiang City Charity Association to develop the lily industry.
2. In order to assist the Ji'an City Chamber of Commerce in Jiangxi Province, ―100 Enterprises to Help 100 Villages‖, education and
poverty alleviation activities, the company plans to donate RMB150,000 to poor village high schools and college students.
3. Donated RMB30,000 to two students at Jiangxi Ganzhou Zhanggong district Shahe Longcun village.
The Company will continue to fulfill its social responsibility for precision poverty alleviation, and make donations from time to time
based on business development.


XVI. Other material events

□ Applicable √ Inapplicable
The Company had no other significant event to be explained in the report period.


XVII. Material events of subsidiaries

□ Applicable √ Inapplicable




                                                                                                                                    35
                                                                              Interim Report 2019 of China Fangda Group Co., Ltd.




                Chapter 6 Changes in Share Capital and Shareholders

I. Changes in shares

1. Changes in shares

                                                                                                                           In share

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

                      Quantity       Proporti   Issued    Bon    Transferr      Others       Subtotal        Quantity      Proporti
                                       on        new      us      ed from                                                     on
                                                shares    shar    reserves
                                                           es

I. Shares with                                                                                                1,431,568      0.13%
trade restriction     1,431,568        0.12%
conditions

1. Other                                                                                                      1,431,568      0.13%
                      1,431,568        0.12%
domestic shares

                                                                                                              1,431,568      0.13%
Domestic
                      1,431,568        0.12%
natural person
shares

II. Shares                                                                                                1,121,952,621     99.87%
without trading     1,148,308,0
                                     99.88%                                  -26,355,400     -26,355,4
limited                         21
                                                                                                    00
conditions

1. Common           678,283,904                                                                             678,283,904     60.38%
                                     58.99%
shares in RMB

2. Foreign                                                                                                  443,668,717     39.49%
shares in                                                                                    -26,355,4
                    470,024,117      40.88%                                  -26,355,400
domestic                                                                                            00
market

III. Total of       1,149,739,5       100.00                                                 -26,355,4    1,123,384,189      100.00
                                                                             -26,355,400
capital shares                  89          %                                                       00                             %

Reasons
√ Applicable □ Inapplicable
During the reporting period, the Company repurchased 26,355,400 shares of domestically listed foreign shares (B shares).


Approval of the change
√ Applicable □ Inapplicable

                                                                                                                                   36
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


The Company held the 10th meeting of the 8th Board of Directors and the first extraordinary shareholders meeting of 2018 on
September 10 2018 and September 27 2018 respectively and reviewed and approved the repurchase of some domestically listed
foreign shares (B shares).


Share transfer
√ Applicable □ Inapplicable
From December 19, 2018 to January 3, 2019, the Company repurchased 32,097,497 shares of B shares through centralized bidding,
and completed the cancellation of the shares at China Securities Depository and Clearing Co., Ltd. Shenzhen Branch on January 11,
2019.


Progress in the implementation of share repurchase
√ Applicable □ Inapplicable

        Period               Number of shares          Fund used              Highest     Lowest price       Date of
                                                                               price      (HKD/share)      cancellation
                                                                            (HKD/share)
December 19, 2018 to            5,742,097            19,488,199.08             3.58            3.24        January 11,
Monday, December 31,                                                                                          2019
         2018
  January 02, 2019 to           26,355,400           93,524,433.13
    January 3, 2019
         Total                  32,097,497           113,012,632.21


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


2. Changes in conditional shares

□ Applicable √ Inapplicable


II. Share placing and listing

□ Applicable √ Inapplicable


III. Shareholders and shareholding

                                                                                                                              In share

Number of shareholders of                                  62,141 Number of shareholders of                                        0


                                                                                                                                   37
                                                                                        Interim Report 2019 of China Fangda Group Co., Ltd.


common shares at the end of                                           preferred stocks of which voting
the report period                                                     rights recovered in the report
                                                                      period

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

                                                           Number of                                                   Pledging or freezing
                                                Sharehol    common                         Condition
                                                                           Change in                   Unconditional
                               Nature of          ding     shares held                         al
       Shareholder                                                       the reporting                   common        Share
                              shareholder       percenta at the end of                      common                               Quantity
                                                                               period                     shares       status
                                                  ge       the report                        shares
                                                             period

Shenzhen Banglin            Domestic
Technologies                non-state legal      10.08% 113,202,154 -                                    113,202,154 Pledged    32,860,000
Development Co., Ltd.       person

                            Foreign legal
Shengjiu Investment Ltd.                          8.52% 95,688,766 1,813,128                              95,688,766
                            person

Gong Qing Cheng Shi Li
He Investment               Domestic
Management Partnership      non-state legal       2.38% 26,791,488 -                                      26,791,488
Enterprise (limited         person
partner)

                            Domestic
Fang Wei                                          1.65% 18,514,449 -16,097,004                            18,514,449
                            natural person

SUN HUNG KAI
                            Foreign legal
INVESTMENT                                        0.89% 10,053,618 -115,384                               10,053,618
                            person
SERVICES LTD

VANGUARD
                            Foreign legal
EMERGING MARKETS                                  0.71%      7,946,483 -                                   7,946,483
                            person
STOCK INDEX FUND

Shenwan Hongyuan
                            Foreign legal
Securities (Hong Kong)                            0.55%      6,158,732 -13,720,415                         6,158,732
                            person
Co., Ltd.

VANGUARD TOTAL
                            Foreign legal
INTERNATIONAL                                     0.52%      5,872,007 -153,951                            5,872,007
                            person
STOCK INDEX FUND

                            Domestic
Qu Chunlin                                        0.38%      4,236,961 386,900                             4,236,961
                            natural person

First Shanghai Securities   Foreign legal
                                                  0.36%      4,001,704 -                                   4,001,704
Limited                     person

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



                                                                                                                                            38
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


issue.

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

                                       Top 10 shareholders of unconditional common shares

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

Shenzhen Banglin Technologies                                                                     RMB common
                                                                                   113,202,154                             113,202,154
Development Co., Ltd.                                                                             shares

                                                                                                  Foreign shares
Shengjiu Investment Ltd.                                                            95,688,766 listed in domestic           95,688,766
                                                                                                  exchanges

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

                                                                                                  RMB common
Fang Wei                                                                            18,514,449                              18,514,449
                                                                                                  shares

                                                                                                  Foreign shares
SUN HUNG KAI INVESTMENT
                                                                                    10,053,618 listed in domestic           10,053,618
SERVICES LTD
                                                                                                  exchanges

                                                                                                  Foreign shares
VANGUARD EMERGING
                                                                                      7,946,483 listed in domestic           7,946,483
MARKETS STOCK INDEX FUND
                                                                                                  exchanges

                                                                                                  Foreign shares
Shenwan Hongyuan Securities
                                                                                      6,158,732 listed in domestic           6,158,732
(Hong Kong) Co., Ltd.
                                                                                                  exchanges

VANGUARD TOTAL                                                                                    Foreign shares
INTERNATIONAL STOCK                                                                   5,872,007 listed in domestic           5,872,007
INDEX FUND                                                                                        exchanges

                                                                                                  RMB common
Qu Chunlin                                                                            4,236,961                              4,236,961
                                                                                                  shares

                                                                                                  Foreign shares
First Shanghai Securities Limited                                                     4,001,704 listed in domestic           4,001,704
                                                                                                  exchanges

No action-in-concert or related      Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu
parties among the top10              Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology


                                                                                                                                      39
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


unconditional common share            Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment Management Partnership
shareholders and between the top10 Enterprise are related parties. The Company is not notified of other action-in-concert or
unconditional common share            related parties among the other holders of current shares.
shareholders and the top10 common
share shareholders

Top-10 common share shareholders
                                      None
participating in margin trade

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




                                                                                                                                40
                                                           Interim Report 2019 of China Fangda Group Co., Ltd.




                                     Chapter 7 Preferred Shares

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




                                                                                                           41
                                                                             Interim Report 2019 of China Fangda Group Co., Ltd.




       Chapter 8 Particulars about the Directors, Supervisors, and

                                                   Senior Management

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

□ Applicable √ Inapplicable
The Company’s Directors, supervisors and senior management shareholding has remained unchanged during the report period. For
details, please refer to the 2018 annual report.


II. Changes in the Directors, Supervisors and Senior Executives

□ Applicable √ Inapplicable
The Company’s Directors, supervisors and senior management have remained unchanged during the report period. For details, please
refer to the 2018 annual report.




                                                                                                                                42
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.




           Chapter 9 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




                                                                                                                                  43
                                                                              Interim Report 2019 of China Fangda Group Co., Ltd.




                                   Chapter 10 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.
                                                                                                                         In RMB

                  Item                                  June 30, 2019                            December 31, 2018

Current asset:

     Monetary capital                                              1,072,726,726.45                            1,389,062,083.76

     Settlement provision

     Outgoing call loan

     Transactional financial assets                                 200,121,506.67

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

     Derivative financial assets                                           17,375.00

     Notes receivable                                                   85,655,871.18                            140,139,692.84

     Account receivable                                            2,118,904,495.79                            1,920,075,031.85

     Receivable financing

     Prepayment                                                         73,540,307.08                             46,454,844.74

     Insurance receivable

     Reinsurance receivable

     Provisions of Reinsurance
contracts receivable

     Other receivables                                              162,536,536.53                               139,990,188.26

        Including: interest receivable                                    366,666.66



                                                                                                                              44
                                                    Interim Report 2019 of China Fangda Group Co., Ltd.


                  Dividend receivable

     Repurchasing of financial assets

     Inventory                              750,395,540.06                             651,405,832.29

     Contract assets

     Assets held for sales

     Non-current assets due in 1 year

     Other current assets                   114,294,388.81                              51,698,111.14

Total current assets                       4,578,192,747.57                          4,338,825,784.88

Non-current assets:

     Loan and advancement provided

     Debt investment

     Sellable financial assets                                                          21,674,008.23

     Other debt investment

     Investment held until mature

     Long-term receivable

     Long-term share equity investment       69,779,924.33                              70,105,657.88

     Investment in other equity tools        21,674,008.23

     Other non-current financial assets

     Investment real estate                5,285,303,323.58                          5,256,442,406.63

     Fixed assets                           431,948,450.66                             455,274,241.83

     Construction in process                 90,993,650.25                              58,269,452.72

     Productive biological assets

     Gas & petrol

     Use right assets

     Intangible assets                       79,441,627.18                              80,313,240.67

     R&D expense

     Goodwill

     Long-term amortizable expenses            2,476,634.82                              2,114,331.46

     Deferred income tax assets             357,050,574.16                             356,474,925.76

     Other non-current assets                23,941,839.67                              19,360,083.67

Total of non-current assets                6,362,610,032.88                          6,320,028,348.85

Total of assets                           10,940,802,780.45                         10,658,854,133.73

Current liabilities

     Short-term loans                       900,000,000.00                             208,000,000.00



                                                                                                    45
                                                      Interim Report 2019 of China Fangda Group Co., Ltd.


       Loans from Central Bank

       Call loan received

       Transactional financial liabilities

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

       Derivative financial liabilities                                                    1,625,725.00

       Notes payable                          533,557,330.40                             507,864,518.19

       Account payable                        953,298,396.58                           1,039,630,798.64

       Prepayment received                    132,431,063.25                             278,577,848.54

       Selling of repurchased financial
assets

       Deposit received and held for
others

       Entrusted trading of securities

       Entrusted selling of securities

       Employees’ wage payable                23,925,424.42                              44,513,062.17

       Taxes payable                           21,432,798.90                             107,709,999.19

       Other payables                         836,350,288.81                             813,118,699.84

         Including: interest payable            2,423,014.69                               2,098,971.44

                 Dividend payable

       Fees and commissions payable

       Reinsurance fee payable

       Contract liabilities

       Liabilities held for sales

       Non-current liabilities due in 1
                                              800,000,000.00                             200,000,000.00
year

       Other current liabilities               10,023,641.11                               9,328,682.25

Total current liabilities                    4,211,018,943.47                          3,210,369,333.82

Non-current liabilities:

       Insurance contract provision

       Long-term loans                        593,978,153.39                           1,193,978,153.39

       Bond payable

         Including: preferred stock

                 Perpetual bond



                                                                                                      46
                                                                              Interim Report 2019 of China Fangda Group Co., Ltd.


     Lease liabilities

     Long-term payable

     Long-term employees’ wage
payable

     Anticipated liabilities                                             6,672,052.01                              6,831,162.99

     Deferred earning                                                   10,956,741.32                             10,401,161.30

     Deferred income tax liabilities                               1,044,043,233.97                            1,042,086,700.35

     Other non-current liabilities

Total of non-current liabilities                                   1,655,650,180.69                            2,253,297,178.03

Total liabilities                                                  5,866,669,124.16                            5,463,666,511.85

Owner’s equity:

     Share capital                                                 1,123,384,189.00                            1,155,481,686.00

     Other equity tools

        Including: preferred stock

                 Perpetual bond

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

     Less: Shares in stock                                                                                        10,831,437.66

     Other miscellaneous income                                          3,605,436.34                              7,382,087.59

     Special reserves

     Surplus reserves                                                   54,042,195.07                            120,475,221.40

     Common risk provisions

     Retained profit                                               3,841,302,110.76                            3,921,225,872.96

Total of owner’s equity belong to the
                                                                   5,023,788,122.76                            5,195,187,621.88
parent company

     Minor shareholders’ equity                                        50,345,533.53

Total of owners’ equity                                           5,074,133,656.29                            5,195,187,621.88

Total of liabilities and owner’s interest                        10,940,802,780.45                           10,658,854,133.73


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


2. Balance Sheet of the Parent Company

                                                                                                                         In RMB

                    Item                                June 30, 2019                            December 31, 2018

Current asset:

     Monetary capital                                               101,688,461.26                               410,118,157.55



                                                                                                                              47
                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


     Transactional financial assets

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

     Derivative financial assets

     Notes receivable                      200,000,000.00                             200,000,000.00

     Account receivable                         14,565.67                                 471,039.12

     Receivable financing

     Prepayment                              1,661,827.83                               6,733,047.16

     Other receivables                    1,320,828,678.84                            822,543,653.04

       Including: interest receivable

                 Dividend receivable       100,000,000.00                             100,000,000.00

     Inventory

     Contract assets

     Assets held for sales

     Non-current assets due in 1 year

     Other current assets                     6,711,425.57                                919,388.18

Total current assets                      1,630,904,959.17                          1,440,785,285.05

Non-current assets:

     Debt investment

     Sellable financial assets                                                         21,674,008.23

     Other debt investment

     Investment held until mature

     Long-term receivable

     Long-term share equity investment    1,013,339,495.35                            983,339,494.35

     Investment in other equity tools       21,674,008.23

     Other non-current financial assets

     Investment real estate                309,189,866.37                             309,189,866.37

     Fixed assets                           52,804,391.71                              53,784,811.23

     Construction in process

     Productive biological assets

     Gas & petrol

     Use right assets

     Intangible assets                       1,961,314.57                               2,112,301.97

     R&D expense


                                                                                                   48
                                                      Interim Report 2019 of China Fangda Group Co., Ltd.


       Goodwill

       Long-term amortizable expenses             777,499.64                                 917,499.68

       Deferred income tax assets              38,972,942.37                              34,555,598.81

       Other non-current assets

Total of non-current assets                  1,438,719,518.24                          1,405,573,580.64

Total of assets                              3,069,624,477.41                          2,846,358,865.69

Current liabilities

       Short-term loans                       500,000,000.00                             200,000,000.00

       Transactional financial liabilities

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

       Derivative financial liabilities

       Notes payable

       Account payable                            606,941.85                                 676,941.85

       Prepayment received                        694,791.63                                 733,274.16

       Contract liabilities

       Employees’ wage payable                 1,001,120.09                               2,145,763.39

       Taxes payable                              819,162.49                                 341,004.65

       Other payables                         450,775,536.65                             300,006,406.51

         Including: interest payable            1,162,456.96                                 740,208.33

                  Dividend payable

       Liabilities held for sales

       Non-current liabilities due in 1
                                              500,000,000.00
year

       Other current liabilities

Total current liabilities                    1,453,897,552.71                            503,903,390.56

Non-current liabilities:

       Long-term loans                        100,000,000.00                             500,000,000.00

       Bond payable

         Including: preferred stock

                  Perpetual bond

       Lease liabilities

       Long-term payable

       Long-term employees’ wage


                                                                                                      49
                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


payable

     Anticipated liabilities

     Deferred earning

     Deferred income tax liabilities                     64,030,014.06                              64,130,617.41

     Other non-current liabilities

Total of non-current liabilities                        164,030,014.06                             564,130,617.41

Total liabilities                                  1,617,927,566.77                               1,068,034,007.97

Owner’s equity:

     Share capital                                 1,123,384,189.00                               1,155,481,686.00

     Other equity tools

        Including: preferred stock

                Perpetual bond

     Capital reserves                                       360,835.52                                 360,835.52

     Less: Shares in stock                                                                          10,831,437.66

     Other miscellaneous income                           3,590,127.88                               8,756,553.46

     Special reserves

     Surplus reserves                                    54,042,195.07                             120,475,221.40

     Retained profit                                    270,319,563.17                             504,081,999.00

Total of owners’ equity                           1,451,696,910.64                               1,778,324,857.72

Total of liabilities and owner’s interest         3,069,624,477.41                               2,846,358,865.69


3. Consolidated Income Statement

                                                                                                           In RMB

                     Item                    H1 2019                                    H1 2018

1. Total revenue                                       1,425,890,946.99                           1,442,050,896.53

     Incl. Business income                             1,425,890,946.99                           1,442,050,896.53

              Interest income

              Insurance fee earned

              Fee and commission
received

2. Total business cost                                 1,281,585,400.17                           1,172,057,419.48

     Incl. Business cost                               1,066,065,970.56                            935,486,175.73

              Interest expense

              Fee and commission paid



                                                                                                                50
                                                       Interim Report 2019 of China Fangda Group Co., Ltd.


               Insurance discharge payment

               Net claim amount paid

               Net insurance policy
reserves provided

               Insurance policy dividend
paid

               Reinsurance expenses

               Taxes and surcharges              41,481,000.07                            101,204,195.03

               Sales expense                     27,175,638.50                             27,060,141.24

               Administrative expense            82,678,777.56                             66,539,185.89

               R&D cost                          14,702,673.12                              7,995,399.91

               Financial expenses                49,481,340.36                             33,772,321.68

                                                                                           32,139,251.82
                   Including: interest cost      40,476,886.48


                           Interest income        2,439,090.91                              3,715,935.93

        Add: other gains                          4,001,450.51                              2,699,191.58

            Investment gains (―-‖ for loss)     4,056,397.16                             26,244,762.41

            Incl. Investment gains from
                                                   -325,733.55                             -1,071,000.77
affiliates and joint ventures

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

            Exchange gains ("-" for loss)

            Net open hedge gains (―-‖ for
loss)

            Gains from change of fair value
                                                   121,506.67                              -8,896,637.25
(―-― for loss)

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

            Investment impairment loss
                                                                                           -1,854,963.05
("-" for loss)

            Investment gains ("-" for loss)         -27,108.78                             -1,551,865.58

3. Operational profit ("-" for loss)            148,088,132.00                            286,633,965.16

        Plus: non-operational income              4,873,892.15                              7,066,038.41

        Less: non-operational expenditure          378,565.80                                 522,160.43

4. Gross profit ("-" for loss)                  152,583,458.35                            293,177,843.14



                                                                                                       51
                                                     Interim Report 2019 of China Fangda Group Co., Ltd.


     Less: Income tax expenses                 24,019,259.71                             63,046,179.95

5. Net profit ("-" for net loss)              128,564,198.64                            230,131,663.19

  (1) By operating consistency

     1. Net profit from continuous
                                              128,570,716.39                            230,131,663.19
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
                                              128,581,755.01                            230,131,663.19
owners of parent company

     2. Minor shareholders’ equity               -17,556.37

6. After-tax net amount of other misc.
                                                1,389,774.33                             -1,879,756.17
incomes

  After-tax net amount of other misc.
                                                1,389,774.33                             -1,879,756.17
incomes attributed to parent's owner

     (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
                                                1,389,774.33                             -1,879,756.17
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. Change in the fair value of
financial asset for sale

             4. Gains and losses from
changes in fair value of available-for-sale



                                                                                                     52
                                                                              Interim Report 2019 of China Fangda Group Co., Ltd.


financial assets

              5. Held-to-mature
investment reclassified as gain and loss in
the financial assets for sales

              6. Other credit investment
credit impairment provisions

              7. Cash flow hedge reserve                                1,396,635.00                                 -1,839,001.25

              8. Translation difference of
                                                                            -6,860.67                                   -40,754.92
foreign exchange statement

              9. Others

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

7. Total of misc. incomes                                             129,953,972.97                               228,251,907.02

     Total of misc. incomes attributable
                                                                      129,971,529.34                               228,251,907.02
to the owners of the parent company

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

8. Earnings per share:

     (1) Basic earnings per share                                                0.11                                         0.19

     (2) Diluted earnings per share                                              0.11                                         0.19

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


4. Income Statement of the Parent Company

                                                                                                                            In RMB

                   Item                                    H1 2019                                      H1 2018

1. Turnover                                                            17,142,022.88                                15,112,290.20

     Less: Operation cost                                               3,496,588.06                                   673,578.25

          Taxes and surcharges                                            645,703.49                                   650,802.82

          Sales expense

          Administrative expense                                       11,286,569.85                                10,133,470.85

          R&D cost

          Financial expenses                                           21,369,380.01                                 7,548,692.03

              Including: interest cost                                 17,322,986.12                                 8,550,029.19

                     Interest income                                      351,128.89                                 1,581,410.05


                                                                                                                                  53
                                                       Interim Report 2019 of China Fangda Group Co., Ltd.


        Add: other gains                           234,066.99                                 114,556.59

            Investment gains (―-‖ for loss)    1,155,183.42                               8,138,483.22

            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
                                                                                           -3,429,128.73
value (―-― for loss)

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

            Investment impairment loss
                                                                                              -98,676.88
("-" for loss)

            Investment gains ("-" for loss)                                                      -574.06

2. Operational profit (―-‖ for loss)          -18,262,235.73                                830,406.39

        Plus: non-operational income                13,947.68                                 258,644.66

        Less: non-operational expenditure          106,388.64                                     738.00

3. Gross profit (―-‖ for loss)                -18,354,676.69                              1,088,313.05

        Less: Income tax expenses                -4,545,338.46                              1,582,341.85

4. Net profit (―-‖ for net loss)              -13,809,338.23                               -494,028.80

        (1) Net profit from continuous
                                                -13,809,338.23                               -494,028.80
operation ("-" for net loss)

        (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


                                                                                                       54
                                                              Interim Report 2019 of China Fangda Group Co., Ltd.


             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. Change in the fair value
of financial asset for sale

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

             5. Held-to-mature
investment reclassified as gain and loss
in the financial assets for sales

             6. Other credit investment
credit impairment provisions

             7. Cash flow hedge reserve

             8. Translation difference of
foreign exchange statement

             9. Others

6. Total of misc. incomes                              -13,809,338.23                               -494,028.80

7. Earnings per share:

     (1) Basic earnings per share

     (2) Diluted earnings per share


5. Consolidated Cash Flow Statement

                                                                                                         In RMB

                     Item                    H1 2019                                 H1 2018

1. Net cash flow from business operations:

    Cash received from sales of products         1,201,792,721.87                           1,344,633,305.24
and providing of services

    Net increase of customer deposits and
capital kept for brother company



                                                                                                               55
                                                            Interim Report 2019 of China Fangda Group Co., Ltd.


       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                                 1,495,878.35                                876,405.15

       Other cash received from business           48,007,747.43                            243,292,723.31
operation

       Sub-total of cash inflow from business    1,251,296,347.65                         1,588,802,433.70
operations

       Cash paid for purchasing products and      977,060,414.15                            956,677,112.92
services

       Net increase of client trade and
advance

       Net increase of savings in central bank
and brother company

       Cash paid for original contract claim

       Net increase in financial assets held
for trading purposes

       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             162,220,114.55                            141,086,415.75

       Taxes paid                                 177,525,390.09                            208,947,437.06

       Other cash paid for business activities    307,215,431.97                            313,517,735.61


                                                                                                             56
                                                           Interim Report 2019 of China Fangda Group Co., Ltd.


Sub-total of cash outflow from business         1,624,021,350.76                         1,620,228,701.34
operations

Cash flow generated by business                  -372,725,003.11                            -31,426,267.64
operations, net

2. Cash flow generated by investment:

     Cash received from investment              2,093,521,250.01                         4,675,800,000.00
recovery

     Cash received as investment profit           21,362,317.22                             28,989,224.36

     Net cash retrieved from disposal of          13,165,854.60                              9,501,692.00
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         2,128,049,421.83                         4,714,290,916.36
investment

     Cash paid for construction of fixed          90,816,069.59                             45,443,864.13
assets, intangible assets and other long-term
assets

     Cash paid as investment                    2,555,019,000.00                         4,712,583,785.00

     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                       2,707,769,899.90                         4,758,027,649.13

Cash flow generated by investment               -579,720,478.07                             -43,736,732.77
activities, net

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 loans           800,000,000.00                            508,000,000.00

     Cash received from bond placing

     Other cash received from financing               39,406.61
activities

Subtotal of cash inflow from financing           800,039,406.61                            508,000,000.00


                                                                                                             57
                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


activities

     Cash paid to repay debts                         108,000,000.00                               200,000,000.00

     Cash paid as dividend, profit, or                275,410,279.99                               213,616,393.31
interests

     Incl. Dividend and profit paid by
subsidiaries to minority shareholders

     Other cash paid for financing activities             40,000,000.00

Subtotal of cash outflow from financing               423,410,279.99                               413,616,393.31
activities

Net cash flow generated by financing                  376,629,126.62                                  94,383,606.69
activities

4. Influence of exchange rate changes on                    -229,009.27                                1,005,803.87
cash and cash equivalents

5. Net increase in cash and cash equivalents          -576,045,363.83                                 20,226,410.15

     Plus: Balance of cash and cash                   956,190,890.68                               931,285,535.55
equivalents at the beginning of term

6. Balance of cash and cash equivalents at            380,145,526.85                                 951,511,945.70
the end of the period


6. Cash Flow Statement of the Parent Company

                                                                                                               In RMB

                   Item                         H1 2019                                    H1 2018

1. Net cash flow from business
operations:

      Cash received from sales of
                                                            14,039,967.56                              147,110,597.39
products and providing of services

      Tax refunded

      Other cash received from business
                                                          1,674,530,421.33                             882,838,625.05
operation

Sub-total of cash inflow from business
                                                          1,688,570,388.89                           1,029,949,222.44
operations

      Cash paid for purchasing products
                                                             1,824,577.30                                  409,933.49
and services

      Cash paid to and for the staff                         8,465,407.93                                7,664,913.27

      Taxes paid                                             1,250,265.96                               14,786,626.11

      Other cash paid for business
                                                          2,021,264,885.71                           1,276,945,197.63
activities



                                                                                                                      58
                                                      Interim Report 2019 of China Fangda Group Co., Ltd.


Sub-total of cash outflow from business
                                             2,032,805,136.90                          1,299,806,670.50
operations

Cash flow generated by business
                                             -344,234,748.01                            -269,857,448.06
operations, net

2. Cash flow generated by investment:

     Cash received from investment
                                              710,000,000.00                           1,879,880,000.00
recovery

     Cash received as investment profit         1,155,183.42                               9,159,483.22

     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
                                                                                          10,000,000.00
received

Sub-total of cash inflow generated from
                                              711,155,183.42                           1,899,039,483.22
investment

     Cash paid for construction of fixed
assets, intangible assets and other                50,698.00                                 421,910.00
long-term assets

     Cash paid as investment                  746,000,001.00                           1,917,870,000.00

     Net cash paid for acquiring
subsidiaries and other operational units

     Other cash paid for investment

Subtotal of cash outflows                     746,050,699.00                           1,918,291,910.00

Cash flow generated by investment
                                               -34,895,515.58                            -19,252,426.78
activities, net

3. Cash flow generated by financing
activities:

     Cash received from investment

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

     Cash received from bond placing

     Other cash received from financing
                                                   39,406.61
activities

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

     Cash paid to repay debts


                                                                                                      59
                                                                                           Interim Report 2019 of China Fangda Group Co., Ltd.


       Cash paid as dividend, profit, or
                                                                                 241,065,709.32                                 180,947,316.65
interests

       Other cash paid for financing
activities

Subtotal of cash outflow from financing
                                                                                 241,065,709.32                                 180,947,316.65
activities

Net cash flow generated by financing
                                                                                 158,973,697.29                                 319,052,683.35
activities

4. Influence of exchange rate changes
                                                                                           405.76
on cash and cash equivalents

5. Net increase in cash and cash
                                                                                 -220,156,160.54                                 29,942,808.51
equivalents

       Plus: Balance of cash and cash
                                                                                 281,594,621.80                                 310,049,329.68
equivalents at the beginning of term

6. Balance of cash and cash equivalents
                                                                                  61,438,461.26                                 339,992,138.19
at the end of the period


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

Amount of the Current Term
                                                                                                                                         In RMB

                                                                                 H1 2019

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

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

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


Correction of
previous errors




                                                                                                                                                 60
                                                           Interim Report 2019 of China Fangda Group Co., Ltd.


Consolidation
of entities under
common control


Others

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

3. Change
amount       in the   -32,0            -10,83            -66,95         -96,09         -182,9 50,345 -132,5
                                                1,389,
current period        97,49            1,437.            7,886.         5,082.         29,254 ,533.5 83,720
                                                774.33
(―-― for             7.00               66                36             78             .15       3       .62
decrease)

                                                                       128,58          129,97            129,95
(1) Total of                                    1,389,                                          -17,55
                                                                        1,755.         1,529.            3,972.
misc. incomes                                   774.33                                           6.37
                                                                           01              34               97

(2) Investment
                      -32,0            -10,83            -66,95                        -88,22 50,363 -37,86
or decreasing of
                      97,49            1,437.            7,886.                        3,945. ,089.9 0,855.
capital by
                       7.00               66                36                             70       0       80
owners

1. Common             -32,0            -10,83            -66,95                        -88,22 50,363 -37,86
shares invested       97,49            1,437.            7,886.                        3,945. ,089.9 0,855.
by owners              7.00               66                36                             70       0       80

2. Capital
contributed by
other equity
instrument
holders

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

4. Others

                                                                        -224,6         -224,6            -224,6
(3) Profit
                                                                       76,837          76,837            76,837
allotment
                                                                           .80            .80               .80

1. Provision of
surplus reserves

2. Common risk
provision


                                                                                                              61
                                                  Interim Report 2019 of China Fangda Group Co., Ltd.


3. Distribution                                                -224,6         -224,6          -224,6
to owners (or                                                 76,837          76,837          76,837
shareholders)                                                     .80            .80             .80

4. Others

(4) Internal
transferring 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. 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, 50,345 5,074,
                   ,384,      1,454,   3,605,
the end of this                                 ,195.0        302,11          788,12 ,533.5 133,65
                   189.0      191.59   436.34
period                                              7            0.76           2.76      3     6.29
                      0

Amount of the Previous Term
                                                                                              In RMB


                                                                                                   62
                                                                                              Interim Report 2019 of China Fangda Group Co., Ltd.


                                                                                    H1 2018

                                                Owners’ Equity Attributable to the Parent Company

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

                       1,183
1. Balance at                                         72,829                            110,69            1,863,        3,238,             3,238,9
                        ,642,                                           8,585,
the end of last                                       ,484.9                            0,396.           191,21         939,20             39,202.
                       254.0                                            847.99
year                                                       6                                  65           8.58           2.18                  18
                             0

       Plus:
Changes in
accounting
policies


Correction of
previous errors


Consolidation
of entities
under common
control


Others

                       1,183
2. Balance at                                         72,829                            110,69            1,863,        3,238,             3,238,9
                        ,642,                                           8,585,
the beginning                                         ,484.9                            0,396.           191,21         939,20             39,202.
                       254.0                                            847.99
of current year                                            6                                  65           8.58           2.18                  18
                             0

3. Change
amount        in the                                                                                     52,585         50,705
                                                                        -1,879,                                                            50,705,
current period                                                                                            ,325.0        ,568.9
                                                                        756.17                                                              568.92
(―-― for                                                                                                    9              2
decrease)

                                                                                                         230,13         228,25
(1) Total of                                                            -1,879,                                                            228,251
                                                                                                          1,663.        1,907.
misc. incomes                                                           756.17                                                             ,907.02
                                                                                                             19             02

(2) Investment
or decreasing
of capital by
owners


                                                                                                                                                  63
                   Interim Report 2019 of China Fangda Group Co., Ltd.


1. Common
shares invested
by owners

2. Capital
contributed by
other equity
instrument
holders

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

4. Others

                              -177,5         -177,5          -177,54
(3) Profit
                              46,338         46,338          6,338.1
allotment
                                  .10           .10                0

1. Provision of
surplus reserves

2. Common
risk provision

3. Distribution               -177,5         -177,5          -177,54
to owners (or                 46,338         46,338          6,338.1
shareholders)                     .10           .10                0

4. Others

(4) Internal
transferring 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. 4. Retained
gain transferred



                                                                   64
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


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

                     1,183
4. Balance at                                  72,829                           110,69         1,915,            3,289,      3,289,6
                     ,642,                                       6,706,
the end of this                                ,484.9                           0,396.        776,54             644,77      44,771.
                     254.0                                       091.82
period                                                 6                             65         3.67               1.10           10
                        0


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

Amount of the Current Term
                                                                                                                              In RMB

                                                                           H1 2019

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

                      1,155,4                                                                                504,08
1. Balance at the                                          360,835. 10,831,4 8,756,55          120,475,                   1,778,324,
                      81,686.                                                                                1,999.0
end of last year                                                52    37.66      3.46            221.40                       857.72
                             00                                                                                   0

       Plus:
Changes in                                                                    -5,166,4         524,860. 4,723,7
                                                                                                                           82,174.65
accounting                                                                      25.58                   03    40.20
policies


Correction of
previous errors

            Others

2. Balance at the 1,155,4                                  360,835. 10,831,4 3,590,12          121,000, 508,80            1,778,407,

                                                                                                                                      65
                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


beginning of          81,686.   52     37.66    7.88           081.43 5,739.2               032.37
current year              00                                                  0

3. Change
amount       in the                                                      -238,48
                      -32,097        -10,831,                 -66,957,                  -326,710,1
current period                                                           6,176.0
                      ,497.00         437.66                   886.36                        21.73
(―-― for                                                                    3
decrease)

(1) Total of misc.                                                       -13,809        -13,809,33
incomes                                                                  ,338.23              8.23

(2) Investment or
decreasing of         -32,097        -10,831,                 -66,957,                  -88,223,94
capital by            ,497.00         437.66                   886.36                         5.70
owners

1. Common
                      -32,097        -10,831,                 -66,957,                  -88,223,94
shares invested
                      ,497.00         437.66                   886.36                         5.70
by owners

2. Capital
contributed by
other equity
instrument
holders

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

4. Others

                                                                         -224,67
(3) Profit                                                                              -224,676,8
                                                                         6,837.8
allotment                                                                                    37.80
                                                                              0

1. Provision of
surplus reserves

2. Distribution to                                                       -224,67
                                                                                        -224,676,8
owners (or                                                               6,837.8
                                                                                             37.80
shareholders)                                                                 0

3. Others

(4) Internal
transferring of
owners’ equity

1. Capitalizing
of capital



                                                                                                 66
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


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

4. Balance at the 1,123,3                                                                              270,31
                                                   360,835.             3,590,12            54,042,1                         1,451,696,
end of this        84,189.                                                                             9,563.1
                                                            52                 7.88            95.07                            910.64
period                  00                                                                                     7

Amount of the Previous Term
                                                                                                                                In RMB

                                                                     H1 2018

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

1. Balance at      1,183,
                                                  71,736,            8,756,5             110,690 586,376,1                  1,961,201,4
the end of last    642,25
                                                  128.89              53.46              ,396.65       24.33                     57.33
year                 4.00

       Plus:
Changes in



                                                                                                                                        67
                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


accounting
policies


Correction of
previous errors


Others

2. Balance at         1,183,
                               71,736,   8,756,5            110,690 586,376,1            1,961,201,4
the beginning         642,25
                               128.89     53.46             ,396.65      24.33                 57.33
of current year         4.00

3. Change
amount       in the
                                                                      -178,040,          -178,040,36
current period
                                                                        366.90                  6.90
(―-― for
decrease)

(1) Total of                                                          -494,028.
                                                                                         -494,028.80
misc. incomes                                                               80

(2) Investment
or decreasing of
capital by
owners

1. Common
shares invested
by owners

2. Capital
contributed by
other equity
instrument
holders

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

4. Others

(3) Profit                                                            -177,546,          -177,546,33
allotment                                                               338.10                  8.10

1. Provision of
surplus reserves

2. Distribution                                                       -177,546,          -177,546,33
to owners (or                                                           338.10                  8.10



                                                                                                   68
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


shareholders)

3. Others

(4) Internal
transferring 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

2. Used this
period

(6) Others

4. Balance at      1,183,
                                                   71,736,             8,756,5             110,690 408,335,7              1,783,161,0
the end of this    642,25
                                                    128.89              53.46              ,396.65      57.43                   90.43
period               4.00


III. General Information

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 Building, Kejinan Road 12, High-tech Zone, Shenzhen. Mr. Xiong Jianming is

                                                                                                                                   69
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


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 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 Department
and IT Department and has established subsidiaries ds including Fangda Decoration, Fangda Automatic, Fangda New Material,
Fangda Property and Fangda New Energy.
The business nature and main business activities of the Company and its subsidiaries (hereinafter referred to as ―the Group‖) include
(1) curtain wall division, research and development, design, production, construction and sales of building curtain walls and materials;
(2) rail transit segment , research and development, design, production, construction and sales of subway screen doors; (3) real estate
division, engaged in real estate development and management, property management on land legally acquired right; (4) new energy
division, photovoltaic power station, photovoltaic R&D, design, production, construction, operation and sales of building integration
(BIPV).
The financial statements and notes are approved at the 17th meeting of the 8th term of the Board held on August 16, 2019.


The consolidation scope for the consolidated financial statements includes the Company and all subsidiaries. During the period,
Fangda Southeast Asia Company Limited was newly established, and the merger of enterprises under the same control increased
Shenzhen Zhongrong Litai Investment Co., Ltd., adding 2 subsidiaries in the current consolidated statement. In this period, Shenzhen
Kexunda Software Co., Ltd., an indirect controlled subsidiary, was canceled, so the current consolidated statement reduced one
subsidiary. For details, please refer to the ―Note VIII. Changes in the scope of consolidation‖ and ―Note IX. Interests in other
entities‖.




IV. Basis for the preparation of financial statements

1. Preparation basis

The financial statements are prepared according to the enterprise financial standard and guidelines, interpretation and other related
regulations (―the Standard‖) issued by the Ministry of Finance. In addition, the Group also complies with the "Regulations on the
Compilation and Submission of Information Disclosures by Companies That Offer Securities to the Public No. 15 - General
Provisions on Financial Reporting" (revised in 2014) and the "Rules for the Compilation and Submission of Information Disclosures
to Companies That Publicly Issue Securities" No. 11 - Special Provisions on the Notes to the Financial Statements of Companies
Engaged in Real Estate Development Disclosure of Financial Information.

The Group prepares the financial statements based on continuous operation.

The Group's auditing is based on the accrual basis. Except for some financial instruments and property held for investment, the
financial statements are prepared based on historical costs. In case of any asset impairment, the impairment provision will be made as
required.




2. Continuous operation

The Company assessed the continuing operations capability of the Company for the 12 months from the end of the reporting period.

                                                                                                                                      70
                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.


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 Group determines the accounting policies and income recognition policies for investment real estate according to the production
and business features. For details, see Note V. 15 and Note V. 24.


1. Statement of compliance to the Enterprise Accounting Standard

The financial report and statements are prepared with compliance to the requirement of the Enterprise Accounting Standard. They
reflect the financial position as of June 30, 2019, and business performance and cash flow situation in year 2019 of the Company
frankly and completely.


2. Fiscal Period

The fiscal year of the Group is the solar calendar year, that is from January 1 to December 31.


3. Operation period

The operation period of the Group is 12 months.


4. Bookkeeping standard money

The Company, domestic subsidiaries and overseas subsidiary Shihui International Holding Co., Ltd. use RMB as bookkeeping
standard money. The overseas subsidiaries of the Company, Fangda Zhichuang Technology (Hong Kong) Co., Ltd., Fangda Australia
Pty Ltd, and Fangda Southeast Asia Co., Ltd. respectively determine Hong Kong Dollar, Australian Dollar and Vietnamese Dong in
the currency of the main economic environment in which they operate. The Group prepares financial statements in RMB.


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

(1) Consolidation of entities under common control

Assets and liabilities obtained by the merging party are calculated at their book value with the merged parties at the merger day in the
consolidated financial statement of the merging party in addition to the adjustment made given the difference in accounting policies.
The differences between the book value of net assets and the book value of consideration price (or the total of face value of share
issued) are adjusted to the capital reserve (share capital premium). If the share capital premium is not enough to offset the difference,
it will be adjusted to the retained gains.

Enterprise merger under common control through multiple transactions

In separate financial statements, the initial investment cost is the book value of the merged party’s net assets that can be shared by the
merging party in the consolidate financial statements of the final controlling party according to the shareholding percentage on the
merging date; adjust the capital surplus (share premium) according to the difference between the initial investment cost and the book

                                                                                                                                        71
                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.


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.

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. Changes in recognized related profit and loss, other misc. incomes and
other owner's equity between the later one of the date when the original stock equity was obtained and the date when the merged
party and merging party become under the common control should respectively write down the retained profit in beginning of the
report period or current period’s profit or loss.

(2) Consolidation of entities under different control

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. On the acquisition day, the assets and
liabilities (if any) acquired by the Group from the acquired party are recognized on the fair value.

If the merger costs exceed the fair value of the recognizable net assets of the acquired party in the merger, it is recognized as goodwill
and measured based the costs after the accumulative impairment provision is deducted; if the the fair value exceeds the costs, it is
included in the income statement for the period after being re-examined.

Where there is new or further evidence on the condition existing on the acquisition date 12 months later and adjustment needs to be
made, the good will should be adjusted and merged.

(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) Consolidation scope

The consolidate scope of consolidated financial statements is determined based on control. Control means the power possessed by the
Group 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. Subsidiaries are enterprises controlled by the Company.

(2) Preparation of Consolidated Financial Statements

The consolidated financial statements are prepared by the Company based on financial statements of the Company and subsidiaries
and according to other related information. During preparation of consolidated financial statements, the accounting policies and
period of the Company and subsidiaries must be the same. Major transactions and balances between companies are offset.

Subsidiaries and businesses increased because of merger of enterprises under the common control during the report period are
deemed consolidated into the consolidate scope from the date of becoming controlled by the final party. The operating result and cash
flows of the subsidiaries and businesses from the date of becoming controlled by the final party should be incorporated into the


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consolidate income statement and consolidate cash flow statement.

For subsidiaries and businesses increased because of merger of enterprises not under the common control, their incomes, expenses
and profits between the date of acquisition and end of the report period should be incorporated into the consolidated income
statement, and the cash flows should be incorporated into the consolidated cash flow statement.

The part of the shareholders’ equity in subsidiaries not owned the Company are separately listed under the shareholders’ equity as
minority shareholders’ equity in the consolidated balance sheet. The part of the subsidiaries’ net profits and losses for the current
period that belongs to minority shareholders is listed as minority shareholders’ profits and losses under net profit in the consolidated
income statement. If the losses of subsidiaries shared by the minority shareholders exceed the part of the owners’ equity of the
subsudiaries at the beginning of the period, the excessive part will offset the minority shareholders’ equity.

(3) Acquisition of subsidiary minority interests

The difference between the investment cost of the long-term equity obtained from acquisition of minority interests and the share of
net assets in the subsidiary calculated continuously based on the increased shareholding percentage, and the difference between the
disposal income obtained from the partial disposal of the subsidiary’s equity investment without losing the control power and the
share of net assets in the subsidiary calculated continuously based on the increased shareholding percentage should be adjusted and
consolidated in the capital surplus in the consolidated balance sheet. Where the capital surplus falls short, the retained income should
be adjusted.

(4) Treatment of loss of subsidiaries’ control power

For loss of control over subsidiaries due to disposal of partial equity investment or other reasons, the remaining equity should be
re-measured at the fair value on the date of loss of the control power; the sum of the consideration obtained from the disposal of stock
equity and the fair value of the remaining equity, minus the sum of the share of the net assets’ book value calculated continuously
from the acquisition date according to the original shareholding percentage and the goodwill should be recorded in the investment
gain of the current period of the loss of control power.

Other misc. incomes related to the equity investment in the original subsidiary is transferred to the current period’s profit and loss
when the control power is losted, except for the other misc. incomes generated by remeasurement and resetting of earning plan or
change in the net assets by the invested party.


7. Recognition of cash and cash equivalents

Cash refers to cash on hand and deposits that can be used at any time for payment. Cash equivalent refers to the investments with
short term, strong liquidity and small risk of value fluctuation that are held by the Group and easily converted into cash with known
amount.


8.Foreign exchange business and foreign exchange statement translation

(1) Foreign currency business

Trades of the Group made in foreign currencies are translated into RMB basing on the spot exchange rate on the date when the trade
is conducted.

At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheet date. The exchange


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differences caused by the difference in exchange rates on the balance sheet date and initial recognizing date or previous 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.

(2) Translation of foreign currency statement

On the balance sheet date, when foreign currency financial statements of overseas subsidiaries are converted, the assets and liabilities
items in the balance sheet are converted using the spot exchange rate on the balance sheet date. The shareholders’ equity items are
calculated as ―undistributed profits‖, except for other items. The spot exchange rate on the date of occurrence is used for conversion.

The income and expense items in the income statement are translated using the exchange rate that is determined by the system’s
reasonable method and approximate to the spot exchange rate on the transaction date.

All items in the cash flow statement are converted according to the exchange rate that is determined by the system's reasonable
method and approximate to the spot exchange rate on the day the cash flow occurs. The impact of changes in exchange rates on cash
is used as a reconciliation item, which is separately presented in the cash flow statement ―Items Affecting Exchange Rate Movements
on Cash and Cash Equivalents‖.

The difference arising from the translation of the financial statements is reflected in the "Other comprehensive income" item under
the shareholders' equity item in the 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) Classification and measurement of financial assets and financial liabilities

      Financial assets and financial liabilities are recognized in the balance sheet when the Company becomes a party to the
contractual terms of the relevant financial instruments.

      Except for accounts receivable that do not have significant financing components, financial assets and financial liabilities are
measured at fair value at initial recognition. For financial assets or liabilities measured at fair value with variations accounted into
current income account, related transaction expenses are accounted into the current income. For other financial assets or liabilities,
the related transaction expenses are accounted into the initial recognized amounts. For accounts receivable that do not have
significant financing components, the Company conducts initial measurement at the actual transaction price.

      (2) Classification and subsequent measurement of financial assets

      (a) Classification of financial assets



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        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 comprehensive income 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.

        The financial assets that are measured at fair value through profit or loss are classified as financial assets measured at amortised
cost:

        ① The business model of the company's management of the financial assets is based on the collection of contractual cash
flows;

        ② The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment of
the principal and the interest based on the outstanding principal amount.

        Financial assets that meet the following conditions and are not designated as at fair value through profit or loss are classified as
financial assets at fair value through other comprehensive income:

        ① The business model of the company's management of the financial assets is aimed at both the collection of contractual cash
flows and the sale of the financial assets;

        ② The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment of
the principal and the interest based on the outstanding principal amount.

        For non-trading equity instrument investments, the Company may, at the time of initial recognition, arbitrarily designate it as a
financial asset that is measured at fair value and whose changes are included in other comprehensive income. The designation is
based on a single investment and the relevant investment is in line with the definition of the equity instrument from the issuer's
perspective.

        The financial assets are measured at fair value through profit or loss. At the time of initial recognition, if the accounting
mismatch can be eliminated or significantly reduced, the Company can arbitrarily designate financial assets that should be measured
at amortized cost or measured at fair value through other comprehensive income Financial assets measured and their changes are
included in the current profit and loss.

        The business model for managing financial assets refers to how the company manages financial assets to generate cash flows.
The business model determines whether the cash flow of financial assets managed by the company is based on contract cash flow,
financial assets sold or both. The Company determines the business model for managing financial assets based on objective facts and
based on the specific business objectives of financial assets management determined by key management personnel.

        (b) Subsequent measurement of financial assets

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

        After the initial recognition, the financial assets are subsequently measured at fair value, and the gains or losses (including
interest and dividend income) are included in the current profit and loss, unless the financial assets are part of the hedging



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relationship.

        ② Equity instrument investment measured at fair value and whose changes are included in other comprehensive income

        After initial recognition, the financial assets of this type are subsequently measured at fair value. Dividend income is included
in profit or loss, and other gains or losses are included in other comprehensive income. When the confirmation is terminated, the
accumulated gains or losses previously included in other comprehensive income are transferred from other comprehensive income
and included in retained earnings.

        ③ Financial assets measured at amortized cost

        After initial recognition, such financial assets are measured at amortized cost using the effective interest method. Gains or
losses arising from financial assets that are measured at amortised cost and are not a component of any of the hedges are recognized
in profit or loss in

        (3) Classification and subsequent measurement of financial liabilities

        The Group classifies financial liabilities into financial liabilities measured at fair value through profit or loss and financial
liabilities measured at amortised cost.
        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.
        Financial liabilities measured at amortized cost
        After initial recognition, other financial liabilities are measured at amortized cost using the effective interest method.
        (4) Presentation of financial instruments
        Financial assets and financial liabilities are presented separately in the balance sheet and are not offset by each other. However,
if the following conditions are met, the net amount offset by each other is listed in the balance sheet:
        ① The company has a statutory right to offset the confirmed amount, and such legal right is currently enforceable;
        ② The company plans to settle the net assets or realize the financial assets and liquidate the financial liabilities at the same
time.
        (5) Final recognition of financial instruments
        The Company derecognises the financial asset when one of the following conditions is met:
        ① The contractual right to receive the cash flows of the financial assets is terminated;
        ② The financial assets have been transferred, and the company transfers almost all the risks and rewards of ownership of the
financial assets to the transferee;
        ③ The financial assets have been transferred. Although the company has neither transferred nor retained almost all the risks
and rewards of ownership of financial assets, it does not retain control over the financial assets.
        If the financial assets transfer as a whole meets the conditions for derecognition, the difference between the carrying amount of
the transferred financial assets on the date of derecognition and the consideration received from the transfer of the financial assets is
recognized in profit or loss.
        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).
        (6) Impairment of financial assets
        On the basis of expected credit losses, the Company conducts impairment test on financial assets and contract assets measured


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at amortized cost and confirms impairment provision.
      Other financial assets held at fair value through the Company are not subject to the expected credit loss model, including equity
instrument investments that are measured at fair value through profit or loss, and are designated at fair value through Income from
equity instrument investments, as well as derivative financial assets
      (6.1) Expected credit loss measurement
      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.
      In measuring the expected credit losses, the longest period of consideration for the company is the longest contract period for
which the company is exposed to credit risk (including consideration of renewal options).
      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.
      For accounts receivable and contract assets, the Company always measures its loss preparation in accordance with the amount
of expected credit losses for the entire life. The Company calculates the expected credit losses of the above financial assets based on
historical credit loss experience, industry data information, and usage preparation matrix. The relevant historical experience is based
on the specific factors of the receivables on the balance sheet date and the current conditions and future economic conditions. The
assessment is adjusted.
      Except for accounts receivable and contract assets, the Company measures its loss for financial instruments that meet the
following conditions in accordance with the amount of expected credit losses in the next 12 months, and the other financial
instruments are equivalent to the entire life expectancy. The amount of credit loss is measured by its loss:
      ① The financial instrument has only a low credit risk on the balance sheet date; or
      ② The credit risk of the financial instrument has not increased significantly since the initial confirmation.
    (6.2) 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) Substantially increased credit risks
      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.
      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:
      1.The debtor’s failure to pay the principal and interest on the contractual maturity date;
      2.A serious deterioration in the external or internal credit rating (if any) of the financial instrument that has occurred or is
expected;
      3.A serious deterioration in the operating results of the debtor that has occurred or is expected;
      4.Changes in existing or anticipated technical, market, economic or legal circumstances that will have a material adverse effect
on the debtor's ability to repay the Group.
      Based on the nature of financial instruments, the Group assesses whether credit risk has increased significantly on the basis of a



                                                                                                                                       77
                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.


single financial instrument or combination of financial instruments. When conducting an assessment based on a combination of
financial instruments, the Group 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. If the object of the receivable is unlikely to pay its full amount to the company or it is overdue for more than 90 days, it
is considered that the default has occurred.
      (6.4) Financial assets with credit impairment
      On the balance sheet date, the Company assesses whether the financial assets measured at amortized cost have incurred 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:
      ① Severe financial difficulties in the issuer or debtor;
      ② The debtor violates the contract or defaults or delays the payment of the interest or principal;
      ③ The Company gives concessions to the debtor in any other circumstances for economic or contractual considerations
relating to the financial difficulties of the debtor;
      ④ The debtor may go bankruptcy or conduct other financial reorganization;
      ⑤ The financial difficulties of the issuer or the debtor have caused the active market of the financial asset to disappear.
     (6.5) 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 is prepared to offset
the carrying amount of the financial asset presented in the balance sheet.
     (6.6) Write-off
      If the Company no longer reasonably expects that the financial asset contract cash flow can be fully or partially recovered, the
book balance of the financial asset is directly written down. 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. However, according to the company's procedures for recovering the due amount,
the financial assets that have been written down may still be affected by the execution activities.
      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.
      (7) Equity instruments
      The consideration received by the Company for the issuance of equity instruments, after deducting transaction costs, is
included in shareholders' equity. Repurchase the consideration and transaction fees paid by the Company's equity instruments to
reduce shareholders' equity.


10. Notes receivable


      For notes receivable, whether or not it contains significant financing components, the company always measures its loss

preparation according to the amount of expected credit losses for the entire duration of the period, and the resulting increase or loss

of losses is formed as an impairment loss or Gains are included in the current profit and loss.

      The Company's evaluation of this category of funds has a lower credit risk. If there is objective evidence that a note receivable

has been credit-depreciated, the Company makes provision for bad debts and confirms expected credit losses for the notes receivable.


                                                                                                                                        78
                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.




11. Account receivable


      The Company considers all reasonable and evidence-based information, estimates the expected credit losses of receivables in a

single or combined manner, and adopts a simplified model of expected credit losses, always measuring the amount of expected credit

losses equivalent to the entire duration of the period. Loss preparation.


(1) Account receivable for which bad debt provision is made by item

(1.1) Account receivable with major individual amount and bad debt provision provided individually


                                                                     For the current year, the Company recognizes project receivables
                                                                     over RMB10 million (inclusive) as ―individual receivable with
Judging basis or standard of major individual amount
                                                                     large amount‖ while recognizes product receivables over RMB2
                                                                     million (included) as ―individual receivable with large amount‖.

                                                                     The Company performs impairment examination individually on
                                                                     each large amount receivables, and recognizes impairment and
Provision method for account receivable with major individual        provides bad debt provision when the impairment is recognized
amount and bad debt provision provided individually                  based on objective evidence. Those not impaired are accounted
                                                                     along with the minor amount receivables and recognized in risk
                                                                     groups.


(1.2) Account receivable with minor individual amount and bad debt provision provided individually


Reasons for separate bad debt provision                              Long account age or deterioration of customer creditability

                                                                     According to the difference between the present value of future
Method of bad debt provision
                                                                     cash flow and the book value




(2) Recognition and providing of bad debt provisions on groups


                               Group                                                   Method of bad debt provision

Account age                                                          Aging method

Combination of assets state (receivables within consolidation,
receivables of real estate property sold with bank mortgage and      Not provided
accounts between the Company and partners)

Receivables adopting the aging method in the group:

                    Age                                    Providing rate for receivable account



                                                                                                                                          79
                                                                               Interim Report 2019 of China Fangda Group Co., Ltd.


                                                  Engineering           Real estate           Others

Within 1 year (inclusive)                                   1.68%                1.00%              1.23%

1-2 years                                                   5.41%                5.00%              3.85%

2-3 years                                                  15.99%                5.00%             15.95%

3-4 years                                                  30.15%               15.00%             33.98%

4-5 years                                                  53.13%               15.00%             76.41%

Over 5 years                                              100.00%               15.00%            100.00%




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. Other receivables


      The Company measures its loss for financial instruments that meet the following conditions in accordance with the amount of

expected credit losses in the next 12 months, and the other financial instruments are equivalent to the entire life expectancy. The

amount of credit loss is measured by its loss:

      ① The amount has only a low credit risk on the balance sheet date; or

      ② The credit risk of the amount has not increased significantly since the initial confirmation.

      For details of the specific accounting judgment processing methods, please refer to "V. 9. Financial Instruments (6) Impairment

of Financial Assets" in this note.


13. Inventories

Whether the Company needs to comply with disclosure requirements of special industries
Yes
Decoration
(1) Classification of inventories

The Group’s inventories include purchased materials, raw materials, low-value consumables, packing materials, OEM materials,
products in process, semi-finished goods, finished goods, inventory, development costs, development products and construction in
process.

(2) Valuation method for issuing inventory

Inventories are measured at cost when procured. Raw materials, products in process, commodity stocks in transit and sel-made
semi-finished products are measured by the weighted average method.

Construction contracts are measured by the effective cost, including direct and indirect expenses generated before the contracts are

                                                                                                                                  80
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


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.

The development costs 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 actual costs of the development product is
priced using the separate pricing method.

(3) Recognition of inventory realizable value and providing of impairment provision

The realizable net value of inventory is the estimated sales prices of the inventory less costs to be incurred until the completion,
estimated sales expense and taxes. 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.

If the inventory cost is higher than the realizable net value on the balance sheet date, the inventory depreciation provision should be
made. The Group makes inventory depreciation provision for separate or a type of inventory. If factors affecting the inventory value
disappear on the balance sheet date, the depreciation provision made should be reversed to the original value.

(4) Inventory system

The Group uses perpetual inventory system.

(5) Amortizing of low-value consumables and packaging materials

Low-value consumables are amortized on on-off amortization basis at using.


14. 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) Initial investment cost determination

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 the investment costs; for long-term equity investment obtained by merger of enterprises not under
common control, the merger cost is the investment cost.

For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost.

(2) Subsequent measurement and recognition of gain/loss

Investments by the Company in subsidiaries are calculated using the cost method; in joint ventures are calculated using the equity
method.

                                                                                                                                       81
                                                                                     Interim Report 2019 of China Fangda Group Co., Ltd.


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.

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 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.

Where the disposal of part of the equity investment leads to loss of control on the invested entity, and the remaining equity after the
disposal can impose common control or significant impacts on the invested entity, use the equity method and make adjustment as if
the equity method was used when the remaining equity was acquired. If not, perform accounting treatment according to provisions in
the Enterprise Accounting Standard No.22 – Recognition and Measurement of Financial Tools. The difference between the fair value
and book value on the date of losing control should be transferred into the profit and loss of this period.

Where the Company’s shareholding decreases and the Company loses the control due to increased investment by another investor,
but the Company can still impose common control or significant impacts on the invested entity, the share of increased net assets of
the invested entity that can be shared by the Company should be calculated based on the new shareholding, the difference between
the net assets and original book value of the original long-term equity investment should be recorded in the profit and loss of this
period and adjusted as if equity method was used when it was acquired according to the new shareholding proportion.

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.

                                                                                                                                       82
                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.


(3) Basis for recognition of major influence on invested entities

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 that can
be executed in this period held by the investor and other party into shares of the invested entity should be considered.

When Company directly or indirectly holds 20% (inclusive) but less than 50% of the shares with voting rights of the invested entity,
it is generally considered that the Company can impose significant impacts unless there is clear evidence proving that the Company
shall not participate in the production and business decision making of the company; when the Company holds less than 20% of the
shares with voting rights, it is generally not considered that the Company has significant impacts on the invested entity, unless there
is clear evidence proving the contrary.

(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.

(5) Impairment examination and providing of impairment provision

See Note V. 20 for the assets impairment provision method for investment in subsidiaries and joint ventures.


IX. Investment real estates

Measuring mode of investment real estate
Measurement at fair value
Basis of choosing the measurement at fair value

For investment real estates with an active real estate transaction market and the Group can obtain market price and other information
of same or similar real estates to reasonably estimate the investment real estates’ fair value, the Group 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 estate 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.

The difference of the proceeds from sales, transfer, retirement or destruction of investment real estates with book value and related
taxes deducted is accounted into the current gain/loss account.


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                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.


Investment real estate that use the cost method for further measurement adopt the straight-line depreciation provision method. See
Note V. 20 for the provision method.


16. 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. The fixed assets can only be recognized hen
economic interests related to the fixed assets are very likely to flow into the company and the costs of the fixed assets can be reliably
measured. The Group measures fixed assets at the actual costs when the fixed assets are obtained


(2) Depreciation method


                                                                                                                Annual depreciation
           Type               Depreciation method              Service year              Residual rate
                                                                                                                        rate %

Houses & buildings          Average age                35-45                      10%                         2%-2.57%

Mechanical equipment        Average age                10                         10%                         9%

Transportation facilities   Average age                5                          10%                         18%

Electronics and other
                            Average age                5                          10%                         18%
devices

PV power plants             Average age                20                         5%                          4.75%


17. Construction in process

The Group recognizes the cost of construction in process according to the actual construction expense, including necessary
engineering expenses, borrowing costs to be capitalized before the engineering reaches the preset service condition and other related
costs.

Construction in process will be transferred to fixed assets when it reaches the preset service condition.

See Note V. 20 for the provision method for construction in process.


18. Borrowing expenses

(1) Recognition principles for capitalization of borrowing expenses

Borrowing expenses occurred to the Group that can be accounted as purchasing or production of asset satisfying the conditions of
capitalizing, are capitalized and accounted as cost of related asset. Borrowing expenses start to be capitalized when all of the
followings are satisfied:

① Asset expense has already occurred. Asset expenses include cash payment, non-cash asset transferring, or undertaking of debt
with interest done for purchasing or producing of assets;




                                                                                                                                       84
                                                                                    Interim Report 2019 of China Fangda Group Co., Ltd.


② Borrowing costs have occurred;

③ Purchasing or production activity, which is necessary for the asset to reach the useful status, has already started.

(2) Capitalization period of borrowing expenses

When the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing of borrowing expenses shall
be terminated. Borrowing expenses incurred after assets that meet capitalization conditions reach the service or sales conditions are
accounted into the current gain/loss account according to the actual amounts.

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.

(3) 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. The capitalization ratio is the weighted average interest rate of general borrowings.

In the capitalization period, the exchange difference of special borrowings in foreign currencies should be fully capitalized. The
exchange difference should be recorded in the profit and loss of this period.




(XIX) Intangible assets

(1) Pricing method, service life and depreciation test

The Group’s intangible assets include land using rights, trademarks, patent, special technologies, and software.

Intangible assets are initially measured at costs and the useful life will be determined when obtained. Where the useful life is limited,
the intangible assets will be amortized within the predicted useful life by using the amortization method that can reflect predicted
realization way of the economic benefit of the assets; whether the realization way cannot be reliably confirmed, use the straight-line
method. If the useful life is uncertain, the intangible assets are not amortized.

Intangible assets with limited useful life are amortized as followings:


Type                                                                            Useful life                  Basis of amortization
Land using right                                                             Beneficial age                               Average age
Trademarks and patents                                                              10 years                              Average age
Proprietary technology                                                              10 years                              Average age
Software                                                                        5, 10 years                               Average age

At the end of each year, the Group will reexamine the useful life and amortization basis of intangible assets with limited useful life. If
they change, adjust the prediction and handle it according to accounting estimate changes.



                                                                                                                                        85
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


On the balance sheet day, if the intangible assets become unlikely to bring future economic benefits for the Group, transfer all the
intangible assets’ book value into the current gain/loss account.

See Note V. 20 for the impairment provision method for intangible assets.




(2) Accounting policies for internal R&D expenses

The Group divides internal R&D project expenses into research and development expenses.

The research expenses are accounted the current gain/loss account.

Development expenses can only be capitalized when the following conditions are satisfied: the technology is feasible for use or sales;
there is the intention to use or sell the intangible assets; it can be proven that the product generated by the intangible assets is
demanded or the intangible assets in demanded; if the intangible is used internally, it can be proven that it is useful; with necessary
technical and financial resources and other resources to complete the development of the intangible assets and the intangible assets
can be used or sold; the development expense can be reliably measured. If not, the development expense is accounted into the current
gain/loss account.

If a research project meets the above-mentioned conditions and passes the technical and economic feasibility study, the project will
enter the development stage.

Expenses in the development stage capitalized are listed as development expense on the balance sheet and transferred to intangible
assets when the project reaches the useful condition.




20. Assets impairment

The Group uses the cost mode to continue measuring the assets impairment to investment real estatement, 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 Group judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists, the Group 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 Group 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 Group 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.



                                                                                                                                    86
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


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 Group.

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.




21. Long-term amortizable expenses

The Group’s long-term amortizable expenses are measured at the actual costs and amortized averagely based on the beneficial term.
For long-term amortizable expenses that are not beneficial in the subsequent account periods, the residual value is fully accounted
into the current gain/loss account.




22. Staff remuneration

(1) Accounting of operational leasing

The Group pays for the medical insurance, job injury insurance and breeding insurance and housing fund according to employees’
wages and bonus and recognizes them as liabilities, which are recorded into the profit and loss or related assets costs in the current
period. If the liabilities cannot be fully paid within 12 months upon the end of the report period in which the employees provide
service, and the financial impacts are substantial, the liabilities should be measured at the discounted amount.




(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.




(3) Accounting of dismiss welfare

Where the Group provides dismiss welfare for employees, the staff remuneration liabilities is recognized on the earlier one of the
following two date: when the Group cannot cancel the dismiss welfare provided for termination of employment or layoff; when the
Group recognizes the costs or expenses of reorganization related to the payment of dismiss welfare.

                                                                                                                                      87
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.




23. 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 Group;

(2) Execution of this responsibility may cause financial benefit outflow from the Group;

(3) Amount of the liability can be reliably measured.

Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility. The book value
of expected liability is revised at balance sheet day, and adjustment will be made to reflect current best estimation.




24. Revenue

Whether the Company needs to comply with disclosure requirements of special industries
Yes
Decoration
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
 If they are not in the same year, then use the estimation on percentage basis when it is possible.
The completion percentage is the costs occurred on the total cost.
The reliable estimation of the result of providing of labor service must meet the following conditions: A. the revenue can be reliably
measured; B. the economic benefit is very likely to flow into the company; C. the completion can be determined reliably; D. costs
incurred or will be incurred can be reliably measured.
If the result cannot be reliably estimated, use the service cost amount of the compensation obtained or will be obtained to recognize
the revenue of the providing of labor service and recognize the incurred laber service cost as the current expense. If no compensation
can be obtained for incurred labor service cost, no revenue can be recognized.
③ Demising of asset using rights
The revenue is recognized when the financial benefit in connection with the demising of asset using right was received and the
amount can be reliably measured.
④ Construction contracts
On the balance sheet day, the Group recognizes the contract income and costs using the completion percentage method if the result of
the construction contract can be reliably estimated. If not, such contracts are treated differently. If the contract cost can be recovered,
the revenue is recognized according to the actual contract costs that can be recovered and the contract cost is recognized as the
current expense; if not, the contract cost is recognized as the current expense and no revenue is recognized.
If the estimated total costs exceed the total revenue, the Group recognizes the estimated loss as the current expense.
The competition percentage is determined by the share of the costs incurred in the total cost.
The reliable estimation of the result of a construction contract must meet the following conditions: A. the revenue can be reliably


                                                                                                                                         88
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


measured; B. the economic benefit is very likely to flow into the company; C. the completion cost can be clearly distinguished and
determined reliably; D. the completion and costs that will be incurred for completion of the contract can be reliably recognized.
(2) Specific methods for revenue recognition
① Construction contracts
Metro screen door projects of the Company and Shenzhen Fangda Automatic System, and curtain wall project of Fangda Jianke are
individual construction contracts. They are accounted by the following means:
Construction contracts completed within a fiscal year are recognized for their income and cost upon completion.
Income and expenses of the construction contracts carried over-year are recognized on percentage basis at balance sheet day when all
of the following conditions are satisfied: contract income can be reliably measured, relative financial benefit can inflow to the
Company; progress of the project and costs to complete the contract can be reliably recognized; cost occurred to complete the
contract can be clearly distinguished and reliably measured, which enables comparing of actual cost with predicted cost.
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.
Parts of the curtain wall project under Fangda Jianke are outsourced, and administrative fees are collected at the agreed rate. For
these construction contracts, income will be recognized when ongoing payment for the project is received and corresponding costs
are transferred.
② Sales 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.
③ Real estate sales
Income from real estate sales is recognized when the contract is signed and performed, 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.




25. Government subsidy

(1) Judgment basis and accounting treatment of assets-related government subsidy

Government subsidy is only recognized when the required conditions are met and the subsidy is received.

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.

Government subsidies related to assets are obtained by the Group to purchase, build or formulate in other manners long-term assets;
or subsidies related to benefits.

For subsidies that can formulate long-term assets without clear government regulations, the part of the subsidies corresponding to the
asset value will be measured as assets-related government subsidies, while the rest of them will be measured as benefit-related

                                                                                                                                         89
                                                                                     Interim Report 2019 of China Fangda Group Co., Ltd.


government subsidies. Where it is difficult to distinguish them from each them, the whole subsidies will be measured as
benefit-related government subsidies.

If the asset-related government subsidy is recognized as deferred gain, should be recorded in gain and loss in the service life.




(2) Judgment basis and accounting treatment of return-related government subsidy

If a government subsidy related to income is used to compensate for related costs or losses that have occurred, it shall be included in
the current profit or loss or write-down related costs; if it is used to compensate for the related costs or losses in the subsequent
period, it shall be included in the deferred income. During the period in which the related cost, expense or loss is recognized, it is
included in the current profit or loss or the relevant cost is written off. Government subsidy measured at the nominal amount is
accounted into current income account. The Group adopts a consistent approach to the same or similar government subsidies.

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.

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.

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.




26. Differed income tax assets and differed income tax liabilities

Income tax includes current and deferred income tax 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 Group 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.

The taxable temporary difference recognizes the related deferred income tax liabilities, unless the taxable temporary difference is
created by the following transactions:

(1) 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) For taxable temporary difference related to investment in subsudiaries and affiliates, the reversal timing for the temporary
difference can be controlled and the difference is unlikely to be reversed in the foreseeable future.

For deductible temporary difference, deductible loss and tax deduction that can be accounted in subsequent years, the Group

                                                                                                                                                90
                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.


recognizes the incurred deferred income tax assets to the extent to the future income tax proceeds that is very likely to be received for
deducting deductible temporary difference, deductible loss and tax deduction, unless the deductible temporary difference is generated
in following transactions:

(1) the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;

(2) for the taxable temporary difference related to investment in subsidiaries and affiliates, the corresponding deferred income tax
assets are recognized when the following condition is met: the temporary difference is very likely to be reversed in the foreseeable
future and it is very likely to receive the taxable proceeds that can be used to deduct the deductible temporary difference.

On the balance sheet day, the Group measures the deferred income tax assets and liabilities with the tax rate applicable during the
predicted period during which the assets are recovered or the liabilities are paid off and reflects the income tax influence of the assets
recovery and liabilities repayment way on the balance sheet day.

On the balance sheet day, the Group re-exmaines the book value of the deferred income tax assets. If it is unlikely to have adequate
taxable proceeds to reduct 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.




27. Leasing

(1) Accounting of operational leasing

The Group 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 Group's lease forms are mainly operating leases.

(1) The Group is the leasor

Rentals from operational leasing are recognized as current gains on straight basis to the periods of leasing. Initial direct expenses are
recorded to current income account.

(2) The Group is the leasee

Rentals in operational leasing are recorded to relative capital cost or current income account on straight basis to the periods of leasing.
Initial direct expenses are recorded to current income account.




28. Other significant accounting policies and estimates

The Group 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:

(1) Goodwill impairment


                                                                                                                                       91
                                                                                  Interim Report 2019 of China Fangda Group Co., Ltd.


The Group judges whether there is impairment to goodwill at least annually. This required valuation of the use value of the asset
groups with goodwill. While estimating the use value, the Group needs to estimate the cash flow from the asset group in the future
and choose the proper discount rate to calculate the present value of the future cash flow.

(2) Estimation 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.

(3) 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.

(4) Construction contract

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).

(5) 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.

(6) Hedge accounting

When the hedge relationship begins, the Group specifies the hedge relationship in writing to specify the follow: risks management
target and hedging strategy; nature of the hedged item and quantity; nature and quantity of hedging instruments, nature and
identification of hedged risks; evaluation of the hedging effectiveness, including the economic relationship between the hedged item
and hedging instrument, hedging ratio, analysis of the hedging ineffectiveness source;        the beginning date of the specified hedging
relationship.

Cash flow hedging

During the existence of the hedging relationship, the part of the cumulative gain or loss of the hedging instrument within the change
to the current value of the cumulative cash flow of the hedged item is included into other misc. incomes. The part that is lower or
larger than the cash flow change is included into the gain or loss of the current period.

When the hedging relationship ends and related inventory is recognized, the hedging instrument gain or loss recognized in ―Other
misc. income hedging reserve‖ will be transferred to ―Raw materials‖.




                                                                                                                                       92
                                                                               Interim Report 2019 of China Fangda Group Co., Ltd.


29. Major changes in accounting policies and estimates

(1) Changes in accounting policies

√ Applicable □ Inapplicable

    Account policy changes and reasons                   Approval procedure                                  Remark

In 2017, the Ministry of Finance revised
and released the "Accounting Standards for
Business Enterprises No. 22 - Recognition
and Measurement of Financial
Instruments", "Accounting Standards for
Business Enterprises No. 23 - Transfer of
Financial Assets", "Accounting Standards
for Business Enterprises No. 24 - Hedge
Accounting", "Accounting Standards for
                                             15th meeting of the 8th Supervisory
Business Enterprises No. 37 - Financial
                                             Committee
Instruments Presentation" (hereinafter
collectively referred to as the "New
Financial Instruments Standards") and
requires enterprises listed in China to
implement the above accounting standards
from January 1, 2019. In accordance with
the above requirements, the Company
implement the new financial instrument
guidelines from January 1 2019.

On April 30, 2019, the Ministry of Finance
issued the Notice on Amending the Format
of the 2019 Annual General Enterprise
Financial Statements (Accounting [2019]
No. 6). Enterprises requiring the
implementation of corporate accounting
standards should follow the Accounting
Standards for Business Enterprises,                                                       It only affects the listing of related items in
requiring for the preparation of the 2019                                                 the financial statements, and does not
                                             17th meeting of the 8th Board of Directors
interim financial statements and annual                                                   affect the company's total assets, total
financial statements and financial                                                        liabilities, net assets and net profit.
statements for subsequent periods.
In accordance with the above notification
requirements, the Company has adjusted
the financial statement items accordingly,
starting from the 2019 interim financial
statements.




                                                                                                                                        93
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


      The specific impact of the implementation of the new financial instruments guidelines on the financial statement items at the
beginning of 2019 is as follows:
      1. Provision for impairment according to the new financial instrument standard adjustment to reduce the bad debt provision for
accounts receivable by RMB 12,690,700, reduce the provision for bad debts of other receivables by RMB 2,145,000, reduce the
deferred income tax assets by RMB 3,305,900 and increase the initial surplus reserve by RMB 8,300, and increase the undistributed
profit of RMB 11,521,500 at the beginning of the period.
      2. The non-trading equity instrument investment is designated as a financial asset measured at fair value and its changes are
included in other comprehensive income. The original provision for impairment is adjusted to other comprehensive income and the
other comprehensive income at the beginning of the period is reduced by RMB 5,166,400. The initial surplus reserve is increased by
RMB 516,600 and the undistributed profit is increased by RMB 4,649,800 at the beginning of the period.
      The impact of the implementation of the new financial instrument criteria on the company's current financial statement items
and amounts is as follows:
      Provision for impairment according to the new financial instrument standard, adjustment and reduction of bad debt provision
for accounts receivable of RMB1,215,500, increase of bad debt provision for other receivables of RMB2,084,200, corresponding
increase of deferred income tax assets of RMB436,200, increase credit impairment losses of RMB868,800, reduced income tax
expenses of RMB436,200, reduced net profit attributable to the parent company of RMB419,300, and reduced undistributed profit of
RMB416,600.


(2) Changes in major accounting estimates

□ Applicable √ Inapplicable


(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 □ Inapplicable
Consolidated Balance Sheet
                                                                                                                               In RMB

             Item                     December 31, 2018                   January 1, 2019                      Adjustment

Current asset:

     Monetary capital                          1,389,062,083.76                  1,389,062,083.76

     Settlement provision

     Outgoing call loan

     Transactional financial
                                                                                               0.00
assets

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

     Derivative financial
                                                                                               0.00
assets




                                                                                                                                      94
                                                    Interim Report 2019 of China Fangda Group Co., Ltd.


     Notes receivable             140,139,692.84      140,139,692.84

     Account receivable          1,920,075,031.85    1,932,765,689.04                   12,690,657.19

     Receivable financing

     Prepayment                    46,454,844.74        46,454,844.74

     Insurance receivable

     Reinsurance receivable

     Provisions of
Reinsurance contracts
receivable

     Other receivables            139,990,188.26      142,135,200.55                     2,145,012.29

         Including: interest
receivable

                 Dividend
receivable

     Repurchasing of
financial assets

     Inventory                    651,405,832.29      651,405,832.29

     Contract assets

     Assets held for sales

     Non-current assets due
in 1 year

     Other current assets           51,698,111.14       51,698,111.14

Total current assets             4,338,825,784.88    4,353,661,454.36                   14,835,669.48

Non-current assets:

     Loan and advancement
provided

     Debt investment

     Sellable financial assets     21,674,008.23                                       -21,674,008.23

     Other debt investment

     Investment held until
mature

     Long-term receivable

     Long-term share equity
                                   70,105,657.88        70,105,657.88
investment

     Investment in other
                                                        21,674,008.23                   21,674,008.23
equity tools




                                                                                                    95
                                                    Interim Report 2019 of China Fangda Group Co., Ltd.


     Other non-current
financial assets

     Investment real estate      5,256,442,406.63    5,230,896,067.50

     Fixed assets                 455,274,241.83      455,274,241.83

     Construction in process       58,269,452.72        58,269,452.72

     Productive biological
assets

     Gas & petrol

     Use right assets

     Intangible assets             80,313,240.67        80,313,240.67

     R&D expense

     Goodwill

     Long-term amortizable
                                     2,114,331.46        2,114,331.46
expenses

     Deferred income tax
                                  356,474,925.76      356,474,925.76                    -3,305,914.45
assets

     Other non-current assets      19,360,083.67        19,360,083.67

Total of non-current assets      6,320,028,348.85    6,316,722,434.40                   -3,305,914.45

Total of assets                 10,658,854,133.73   10,670,383,888.76                   11,529,755.03

Current liabilities

     Short-term loans             208,000,000.00      208,000,000.00

     Loans from Central
Bank

     Call loan received

     Transactional financial
liabilities

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

     Derivative financial
                                     1,625,725.00        1,625,725.00
liabilities

     Notes payable                507,864,518.19      507,864,518.19

     Account payable             1,039,630,798.64    1,039,630,798.64

     Prepayment received          278,577,848.54      278,577,848.54

     Selling of repurchased
financial assets


                                                                                                    96
                                                     Interim Report 2019 of China Fangda Group Co., Ltd.


     Deposit received and
held for others

     Entrusted trading of
securities

     Entrusted selling of
securities

     Employees’ wage
                                    44,513,062.17        44,513,062.17
payable

     Taxes payable                 107,709,999.19      107,709,999.19

     Other payables                813,118,699.84       813,118,699.84

        Including: interest
                                     2,098,971.44         2,098,971.44
payable

                  Dividend
payable

     Fees and commissions
payable

     Reinsurance fee payable

     Contract liabilities

     Liabilities held for sales

     Non-current liabilities
                                   200,000,000.00      200,000,000.00
due in 1 year

     Other current liabilities       9,328,682.25         9,328,682.25

Total current liabilities         3,210,369,333.82    3,210,369,333.82

Non-current liabilities:

     Insurance contract
provision

     Long-term loans              1,193,978,153.39    1,193,978,153.39

     Bond payable

        Including: preferred
stock

                  Perpetual
bond

     Lease liabilities

     Long-term payable

     Long-term employees’
wage payable

     Anticipated liabilities         6,831,162.99         6,831,162.99


                                                                                                     97
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


     Deferred earning                               10,401,161.30                       10,401,161.30

     Deferred income tax
                                                 1,042,086,700.35                   1,042,086,700.35
liabilities

     Other non-current
liabilities

Total of non-current
                                                 2,253,297,178.03                   2,253,297,178.03
liabilities

Total liabilities                                5,463,666,511.85                   5,463,666,511.85

Owner’s equity:

     Share capital                               1,155,481,686.00                   1,155,481,686.00

     Other equity tools

         Including: preferred
stock

                Perpetual
bond

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

     Less: Shares in stock                          10,831,437.66                       10,831,437.66

     Other miscellaneous
                                                     7,382,087.59                        2,215,662.01                       -5,166,425.58
income

     Special reserves

     Surplus reserves                              120,475,221.40                     121,000,081.43                           524,860.03

     Common risk provisions

     Retained profit                             3,921,225,872.96                   3,937,397,193.54                       16,171,320.58

Total of owner’s equity
                                                 5,195,187,621.88                   5,206,717,376.91                       11,529,755.03
belong to the parent company

     Minor shareholders’
equity

Total of owners’ equity                         5,195,187,621.88                   5,206,717,376.91                       11,529,755.03

Total of liabilities and
                                               10,658,854,133.73                   10,670,383,888.76                       11,529,755.03
owner’s interest

About the adjustment
     In 2017, the Ministry of Finance revised and released the "Accounting Standards for Business Enterprises No. 22 - Recognition
and Measurement of Financial Instruments", "Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets",
"Accounting Standards for Business Enterprises No. 24 - Hedge Accounting" "Accounting Standards for Business Enterprises No. 37
- Financial Instruments Presentation" (hereinafter collectively referred to as the "New Financial Instruments Standards"), and requires
enterprises listed in China to implement the above accounting standards from January 1, 2019.
     In accordance with the above requirements, the Company will implement the new financial instrument standard from January 1,
2019 and reclassify the original financial assets into transactional financial assets, derivative financial assets, other equity instrument


                                                                                                                                         98
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


investments and other non-current financial assets.    Non-transaction equity instrument investment is designated as financial assets
measured at fair value through other comprehensive income and is presented in ―other equity instrument investment‖ items. At the
same time, the loss provision prepared by the original financial instrument standard is adjusted to be in accordance with the new
financial instrument. According to the regulations, it is not necessary to repeat the data of the 2018 comparative period when
preparing the report for each period of 2019, but it is necessary to make retrospective adjustments to the retained earnings or other
comprehensive income at the beginning of 2019.
Balance Sheet of the Parent Company
                                                                                                                                 In RMB

              Item                    December 31, 2018                    January 1, 2019                      Adjustment

Current asset:

     Monetary capital                            410,118,157.55                     410,118,157.55

     Transactional financial
assets

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

     Derivative financial
assets

     Notes receivable                            200,000,000.00                     200,000,000.00

     Account receivable                                471,039.12                       471,039.12                            8,595.25

     Receivable financing

     Prepayment                                       6,733,047.16                     6,733,047.16

     Other receivables                           822,543,653.04                     822,543,653.04                         100,970.95

         Including: interest
receivable

                 Dividend
                                                 100,000,000.00                     100,000,000.00
receivable

     Inventory

     Contract assets

     Assets held for sales

     Non-current assets due
in 1 year

     Other current assets                              919,388.18                       919,388.18

Total current assets                           1,440,785,285.05                   1,440,894,851.25                         109,566.20

Non-current assets:

     Debt investment




                                                                                                                                        99
                                                    Interim Report 2019 of China Fangda Group Co., Ltd.


     Sellable financial assets     21,674,008.23                                       -21,674,008.23

     Other debt investment

     Investment held until
mature

     Long-term receivable

     Long-term share equity
                                  983,339,494.35      983,339,494.35
investment

     Investment in other
                                                        21,674,008.23                   21,674,008.23
equity tools

     Other non-current
financial assets

     Investment real estate       309,189,866.37      309,189,866.37

     Fixed assets                  53,784,811.23        53,784,811.23

     Construction in process

     Productive biological
assets

     Gas & petrol

     Use right assets

     Intangible assets               2,112,301.97        2,112,301.97

     R&D expense

     Goodwill

     Long-term amortizable
                                      917,499.68           917,499.68
expenses

     Deferred income tax
                                   34,555,598.81        34,528,207.26                      -27,391.55
assets

     Other non-current assets

Total of non-current assets      1,405,573,580.64    1,405,546,189.09                      -27,391.55

Total of assets                  2,846,358,865.69    2,846,441,040.34                       82,174.65

Current liabilities

     Short-term loans             200,000,000.00      200,000,000.00

     Transactional financial
liabilities

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

     Derivative financial


                                                                                                   100
                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


liabilities

     Notes payable

     Account payable                 676,941.85           676,941.85

     Prepayment received             733,274.16           733,274.16

     Contract liabilities

     Employees’ wage
                                    2,145,763.39        2,145,763.39
payable

     Taxes payable                   341,004.65           341,004.65

     Other payables               300,006,406.51     300,006,406.51

        Including: interest
                                     740,208.33           740,208.33
payable

                Dividend
payable

     Liabilities held for sales

     Non-current liabilities
due in 1 year

     Other current liabilities

Total current liabilities         503,903,390.56     503,903,390.56

Non-current liabilities:

     Long-term loans              500,000,000.00     500,000,000.00

     Bond payable

        Including: preferred
stock

                Perpetual
bond

     Lease liabilities

     Long-term payable

     Long-term employees’
wage payable

     Anticipated liabilities

     Deferred earning

     Deferred income tax
                                   64,130,617.41       64,130,617.41
liabilities

     Other non-current
liabilities

Total of non-current
                                  564,130,617.41     564,130,617.41
liabilities


                                                                                                  101
                                                                                   Interim Report 2019 of China Fangda Group Co., Ltd.


Total liabilities                                1,068,034,007.97                   1,068,034,007.97

Owner’s equity:

     Share capital                               1,155,481,686.00                   1,155,481,686.00

     Other equity tools

         Including: preferred
stock

                Perpetual
bond

     Capital reserves                                  360,835.52                          360,835.52

     Less: Shares in stock                          10,831,437.66                       10,831,437.66

     Other miscellaneous
                                                      8,756,553.46                       3,590,127.88                       -5,166,425.58
income

     Special reserves

     Surplus reserves                              120,475,221.40                     121,000,081.43                           524,860.03

     Retained profit                               504,081,999.00                     508,805,739.20                         4,723,740.20

Total of owners’ equity                         1,778,324,857.72                   1,778,407,032.37                            82,174.65

Total of liabilities and
                                                 2,846,358,865.69                   2,846,441,040.34                            82,174.65
owner’s interest

About the adjustment
     In 2017, the Ministry of Finance revised and released the "Accounting Standards for Business Enterprises No. 22 - Recognition
and Measurement of Financial Instruments", "Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets",
"Accounting Standards for Business Enterprises No. 24 - Hedge Accounting" "Accounting Standards for Business Enterprises No. 37
- Financial Instruments Presentation" (hereinafter collectively referred to as the "New Financial Instruments Standards"), and requires
enterprises listed in China to implement the above accounting standards from January 1, 2019.
     In accordance with the above requirements, the Company will implement the new financial instrument standard from January 1,
2019 and reclassify the original financial assets into transactional financial assets, derivative financial assets, other equity instrument
investments and other non-current financial assets.    Non-transaction equity instrument investment is designated as financial assets
measured at fair value through other comprehensive income and is presented in ―other equity instrument investment‖ items. At the
same time, the loss provision prepared by the original financial instrument standard is adjusted to be in accordance with the new
financial instrument. According to the regulations, it is not necessary to repeat the data of the 2018 comparative period when
preparing the report for each period of 2019, but it is necessary to make retrospective adjustments to the retained earnings or other
comprehensive income at the beginning of 2019.




(4) Description of the first implementation of the new financial instrument criteria, new lease standard
retrospective adjustment of the previous period comparison data

□ Applicable √ Inapplicable




                                                                                                                                        102
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


VI. Taxation

1. Major taxes and tax rates


                     Tax                                           Tax basis                             Tax rate

VAT                                             Taxable income                          3%, 5%, 6%, 9%, 10%, 13%, 16%

City maintenance and construction tax           Taxable turnover                        1%, 5%, 7%

Enterprise income tax                           Taxable turnover                        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 Group Co., Ltd.                                 15%

Fangda Zhichuang Science and Technology Co., Ltd.                      15%

Fangda New Materials (Jiangxi) Co., Ltd.                               15%

Dongguan Fangda New Material Co., Ltd.                                 15%

Chengda Fangda Construction Technology Co., Ltd.                       15%

Shenzhen Fangda Property Development Co., Ltd.                         25%

Shenzhen Fangda New Energy Co., Ltd.                                   25%

Shenzhen Fangda Property Management Co., Ltd.                          25%

Fangda Property (Jiangxi) Co., Ltd.                                    25%

Pingxiang Fangda Luxin New Energy Co., Ltd.                            25%

Pingxiang Xiangdong Fangda New Energy Co., Ltd.                        25%

Nanchang Xinjian Fangda New Energy Co., Ltd.                           25%

Dongguan Fangda New Energy Co., Ltd.                                   25%

Shenzhen Qianhai Kechuangyuan Software Co., Ltd.                       15%

Fangda Zhichuang Science and Technology (Hong Kong) Co.,
                                                                       16.50%
Ltd.

Shihui International Holding Co., Ltd.                                 16.50%

Shenzhen Hongjun Investment Co., Ltd.                                  25%

Fangda Australia Pty Ltd                                               30%

Shanghai Fangda Qingling Technology Co., Ltd.                          25%

Shenzhen Fangda Cloud Rail Technology Co., Ltd.                        25%

Shenzhen Zhongrong Litai Investment Co., Ltd.                          25%



                                                                                                                               103
                                                                                 Interim Report 2019 of China Fangda Group Co., Ltd.


FANGDA SOUTHEAST ASIA COMPANY LIMITED                               20%


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, Fangda Jianke was entitled to enjoy a tax
preference of enterprise income tax of 15% for three years (2018-2020) since the qualifications were awarded on October 16, 2018.

(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, Fangda Zhichuang was entitled to enjoy a
tax preference of enterprise income tax of 15% for three years (2018-2020) since the qualifications were awarded on October 16,
2018.

(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, Fangda New Material was entitled to enjoy a tax preference of
enterprise income tax of 15% for three years (2018-2020) since the qualifications were awarded on August 13, 2018.

(4) On December 14, 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 qualification
of high-tech enterprises (2017 to 2019), the income tax is levied at 15%.


(5) On November 30, 2016, the subsidiary Dongguan Fangda New Materials Co., Ltd. obtained the ―High-tech Enterprise
Certificate‖ jointly issued by Guangdong Science and Technology Department, Guangdong Provincial Department of Finance,
Guangdong Provincial State Taxation Bureau and Guangdong Provincial Local Taxation Bureau. The income tax shall be levied at
15% within three years after the qualification of the high-tech enterprise is recognized (2016 to 2018).

(6) On November 2, 2015, the Songshan Lake Taxation Bureau of the State Taxation Bureau of Dongguan City notified the
―Songshan Lake National Taxation Pass [2015] No. 3305‖ that the photovoltaic power generation project undertaken by the
subsidiary Dongguan Fangda New Energy Co., Ltd. belongs to public infrastructure projects supported by the state will be exempted
from corporate income tax for three years and corporate income tax will be halved for three years. In 2015, the company entered the
exemption period.

(7) On March 2, 2016, according to the document issued by Luxi National Tax Bureau, the PV power generation project undertaken
by Subsidiary 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.

(8) On June 2, 2016, according to the document issued by Nanchang Xinjian District National Tax Bureau, the PV power generation
project undertaken by Subsidiary Nanchang Xinjian Fangda 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.

(9) 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


                                                                                                                                   104
                                                                                Interim Report 2019 of China Fangda Group Co., Ltd.


to enjoy the exemption.


VII. Notes to the consolidated financial statements

1. Monetary capital

                                                                                                                         In RMB RMB

                    Item                                   Closing balance                             Opening balance

Inventory cash:                                                                 3,448.76                                     5,167.01

Bank deposits                                                            417,446,721.38                               994,706,369.72

Other monetary capital                                                   655,276,556.31                               394,350,547.03

Total                                                                  1,072,726,726.45                             1,389,062,083.76

  Including: total amount deposited in
                                                                          27,209,910.00                                25,269,577.35
overseas

Other note
Note: 1. The book balance of other monetary funds at the end of the period is RMB655,276,556.31, mainly including money deposits
such as money order deposits, stage deposit guarantees guarantee, letters deposits of investment funds and repurchase payments of B
shares.
2. The deposit and frozen deposit and time deposit shall not be treated as cash and cash equivalent in the preparation of cash flow
statements.
3. At the end of the period, the Group's total amount deposited abroad was RMB27,209,910.00.


2. Transactional financial assets

                                                                                                                         In RMB RMB

                    Item                                   Closing balance                             Opening balance

Financial assets measured at fair value
with variations accounted into current                                   200,121,506.67                                          0.00
income account

  Including:

Fund                                                                     200,121,506.67                                          0.00

Financial assets measured at fair value
with variations accounted into current                                              0.00                                         0.00
income account

  Including:

Total                                                                    200,121,506.67                                          0.00

Others:




                                                                                                                                      105
                                                                     Interim Report 2019 of China Fangda Group Co., Ltd.


3. Derivative financial assets

                                                                                                             In RMB RMB

                   Item                        Closing balance                             Opening balance

Hedging tools                                                       17,375.00                                        0.00

Total                                                               17,375.00                                        0.00

Others:


4. Notes receivable

(1) Classification of notes receivable

                                                                                                             In RMB RMB

                   Item                        Closing balance                             Opening balance

Bank acceptance                                                  5,220,227.04                                6,000,000.00

Commercial acceptance                                        80,227,865.72                               134,139,692.84

Financing credit                                                  207,778.42

Total                                                        85,655,871.18                               140,139,692.84


(2) Pledged notes receivable at the end of period

                                                                                                             In RMB RMB

                          Item                                       Amount pledged at the end of the period

Commercial acceptance                                                                                               0.00

Total                                                                                                               0.00


(3) The Group has no endorsed or discounted immature receivable notes at the end of the period.

                                                                                                             In RMB RMB

                   Item                      De-recognized amount                     Not de-recognized amount

Bank acceptance                                             136,630,211.35                                           0.00

Commercial acceptance                                            8,862,482.58                                        0.00

Total                                                       145,492,693.93                                           0.00




                                                                                                                      106
                                                                                    Interim Report 2019 of China Fangda Group Co., Ltd.


Others:

There is no objective evidence that the Group’s bills receivable are impaired and no provision for
impairment of bills receivable has been accrued.

5. Account receivable

(1) Account receivable disclosed by categories

                                                                                                                                  In RMB RMB

                                          Closing balance                                             Opening balance

                        Remaining book                                              Remaining book